-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
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<SEC-DOCUMENT>0000078150-06-000034.txt : 20060629
<SEC-HEADER>0000078150-06-000034.hdr.sgml : 20060629
<ACCEPTANCE-DATETIME>20060629141010
ACCESSION NUMBER:		0000078150-06-000034
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20051231
FILED AS OF DATE:		20060629
DATE AS OF CHANGE:		20060629

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:		06933023

	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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p.MsoBodyTextFirstIndent2, li.MsoBodyTextFirstIndent2, div.MsoBodyTextFirstIndent2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:.25in;
	text-indent:10.5pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.MsoBodyText2, li.MsoBodyText2, div.MsoBodyText2
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:8.0pt;
	font-family:"Times New Roman";
	font-style:italic;}
p.MsoBodyText3, li.MsoBodyText3, div.MsoBodyText3
	{margin:0in;
	margin-bottom:.0001pt;
	page-break-after:avoid;
	punctuation-wrap:simple;
	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";}
p.MsoCommentSubject, li.MsoCommentSubject, div.MsoCommentSubject
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.MsoAcetate, li.MsoAcetate, div.MsoAcetate
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:8.0pt;
	font-family:Tahoma;}
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;
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</head>

<body style='font-family:arial,helvetica,sans-serif;font-size:9pt'  bgcolor=silver 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, 2005</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 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='margin-left:.5in;text-align:center;
text-indent:-.5in' 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>[  ]           SHELL COMPANY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 &#150; Date of event requiring
this shell company report __________</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 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> Cojuangco 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>,
 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'>
 <tr style='page-break-inside:avoid'>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <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'>
 <td  valign=top style=' 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">Common
 Capital Stock, Par Value Five Philippine Pesos Per Share</p>
 </td>
 <td  valign=bottom style=' 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">New York Stock Exchange*</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' 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">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'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">New York Stock Exchange<br>
 <br>
 </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 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'>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <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">10.500% Notes due 2009</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <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">11.375% Notes due 2012</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">10.625% Notes due 2007</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">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <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 at 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'>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">As at December 31, 2005:</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">180,789,003 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'>
 <p style="margin-top:0;margin-bottom:0">451,589,551 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 if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the <br>
Securities Act:       Yes [&#8730;]      No [    ]</p>

<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">If
this report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934:    Yes [   ]     No [&#8730;]</p>

<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 [<a name="OLE_LINK3"></a><a
name="OLE_LINK2">&#8730;</a>]   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 whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filed.  See definition of &#147;accelerated
filer and large accelerated filer&#148; in Rule 12b-2 of the Exchange Act.</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">Large
Accelerated Filer [&#8730;]            Accelerated Filer [  ]
Non-Accelerated Filer [   ]</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 [&#8730;]</p>

<p style='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
this is an annual report, indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act):   Yes [   ]
No [&#8730;]</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>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0  style='width:475.3pt;margin-left:18.9pt;border-collapse:collapse'>

 <tr style='height:.2in'>
 <td  colspan=8 valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:.2in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:.2in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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">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  colspan=3 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>
 </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  colspan=3 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>
 </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  colspan=3 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>
 </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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Key Information</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>
 </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  colspan=3 valign=bottom 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>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Capital Stock</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Dividends Declared</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Dividends Paid</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Exchange Rates</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Risk Factors</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Overview</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Organization</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Strengths</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Strategy</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Wireless</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Fixed Line</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Wireless Network Infrastructure</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Interconnection Agreements</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Licenses and Regulation</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Competition</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Environmental Matters</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Intellectual Property Rights</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Properties</p>
 </td>
 <td  colspan=2 valign=bottom 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=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 4A.</p>
 </td>
 <td  colspan=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Unresolved Staff Comments</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>
 </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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Overview</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Critical Accounting Policies</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Results of Operations</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Other Information</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Terms of Office</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Family Relationships</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Compensation of Key Management Personnel of the PLDT Group</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Share Ownership</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Legal Proceedings</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Related Party Transactions</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Financial Information</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>
 </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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Legal Proceedings</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Dividend Distribution Policy</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=5 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  colspan=2 valign=bottom 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 style='height:12.6pt'>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:12.6pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:12.6pt'>
 <p style="margin-top:0;margin-bottom:0">Item 10.</p>
 </td>
 <td  colspan=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:12.6pt'>
 <p style="margin-top:0;margin-bottom:0">Additional Information</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:12.6pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Material Contracts</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Taxation</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Documents on Display</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Liquidity Risk Management</p>
 </td>
 <td  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=5 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  colspan=2 valign=bottom 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=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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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  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 align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Controls and Procedures</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>
 </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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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 16C.</p>
 </td>
 <td  colspan=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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=6 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  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom 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">Item 16E.</p>
 </td>
 <td  colspan=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Purchases of Equity
 Securities by the Issuer and Affiliated Purchaser</p>
 </td>
 <td  colspan=2 valign=bottom 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 style='height:11.7pt'>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">PART III</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom 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 style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Item 17.</p>
 </td>
 <td  colspan=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Financial Statements</p>
 </td>
 <td  colspan=2 valign=bottom 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=' 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 style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Item 18.</p>
 </td>
 <td  colspan=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Financial Statements</p>
 </td>
 <td  colspan=2 valign=bottom 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=' 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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Item 19.</p>
 </td>
 <td  colspan=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Exhibits</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>
 </tr>
 <tr style='height:12.6pt'>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:12.6pt'>
 <p style="margin-top:0;margin-bottom:0">EXHIBIT INDEX</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:12.6pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:12.6pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:12.6pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:13.95pt'>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:13.95pt'>
 <p style="margin-top:0;margin-bottom:0">CERTIFICATION</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:13.95pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:13.95pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:13.95pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</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>
 </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 Statements 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:10.0pt' 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 peso&#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 Php53.062 to US$1.00 on December 31, 2005.  On June 28, 2006, the volume weighted average exchange rate quoted was
Php53.514 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: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;
ACeS Philippines means ACeS
Philippines Cellular Satellite Corporation, our wholly-owned subsidiary;</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;
Airborne Access means Airborne
Access Corporation, a 51%-owned subsidiary of ePLDT;</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;
ARPU means average monthly revenue
per user;</p>

<p style='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;
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;
Digital Paradise means Digital
Paradise, Inc., a 69.15%-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;
DoCoMo means NTT
DoCoMo, Inc.;</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;
DSL means digital subscriber line;</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;
ePLDT Ventus means ePLDT Ventus,
Inc., a wholly-owned subsidiary of ePLDT carrying the umbrella brand name for
ePLDT&#146;s call center business, including Vocativ and Parlance;</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;
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, 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, 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;
netGames means netGames, Inc., a
60%-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;
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:0in !msorm;text-indent:.5in !msorm;
line-height:7.0pt !msorm;margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NTT means Nippon Telegraph and
Telephone Corporation;</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, a 92.1%-owned subsidiary of Smart; </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:0in !msorm;line-height:94% !msorm;
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;
SIM means
subscriber identification module;</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
messaging 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:0in !msorm;text-indent:.5in !msorm;
line-height:7.0pt !msorm;margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Smart Broadband means Smart
Broadband, Inc. (formerly Meridian Telekoms, Inc.), our wireless broadband
provider and a wholly-owned subsidiary of Smart; </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;
VAS means value-added 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;
Vocativ means Vocativ 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;
VSAT means very small aperture
terminal; </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;
WAP means 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;
W-CDMA means wireless-code
division multiple access; 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;
Wolfpac means Wolfpac Mobile,
Inc., our wireless content operator and a wholly-owned subsidiary of Smart.</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="_Toc75779185"></a><a name="_Toc46082244">FORWARD-LOOKING STATEMENTS</a></p>

<p style='text-indent:.5in;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">Some information in this report may contain
forward-looking statements within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities
Exchange Act of 1934, as amended.  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.  These
forward-looking statements are subject to risks, uncertainties and assumptions,
some of which are beyond our control.  In addition, these forward-looking
statements reflect our current views with respect to future events and are not
a guarantee of future performance.  Actual results may differ materially from
information contained in the forward-looking statements as a result of a number
of factors, including, without limitation, the risk factors set forth in
Item&nbsp;3. &#147;Key Information &#150; Risk Factors.&#148;  When considering forward-looking statements, you should keep
in mind the description of risks and other cautionary statements in this
report.  </p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">You
should also keep in mind that any forward-looking statement made by us in this
report or elsewhere speaks only as at 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='text-indent:.5in;line-height:8.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><a name="_Toc75779186"></a><a name="_Toc46082245">&nbsp;</a></p>

<p style="margin-top:0;margin-bottom:0">PART 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='page-break-after:avoid' 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:8.0pt;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='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 name="_Toc75779188"></a><a
name="_Toc46082247">Item 2.        Offer
Statistics and Expected Timetable</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">Not
applicable.</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-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:8.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:auto' 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:8.0pt;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">The
selected consolidated financial information below should be read in conjunction
with, and is qualified in its entirety by reference to, our 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.</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' 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='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:100.0%;border-collapse:collapse'>
 <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:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=10 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=center style='margin-right:8.65pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Consolidated Financial Data</b></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:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=10 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=center style='margin-right:8.65pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</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: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='text-align:center;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </div>
 </td>
 <td   colspan=3 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='text-align:center;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0"><b>2005</b>(1)</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='text-align:center;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0"><b>2004</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='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='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='text-align:center;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</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=10 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">(in millions, except operating income per share, earnings per common
 share, ratio of earnings to fixed charges and dividends declared per common
 share)</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:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0"><i>Amounts in conformity
 with U.S. GAAP:</i></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   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   colspan=3 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>
 <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>
 <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>
 </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: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=' 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   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   colspan=3 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>
 <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>
 </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: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:8.05pt;text-align:right' style="margin-top:0;margin-bottom:0">Php123,335</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:7.5pt;text-align:right' style="margin-top:0;margin-bottom:0">US$2,324</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:8.0pt;text-align:right' style="margin-top:0;margin-bottom:0">Php121,173</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:7.85pt;text-align:right' style="margin-top:0;margin-bottom:0">Php111,200</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:7.5pt;text-align:right' style="margin-top:0;margin-bottom:0">Php93,831</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.5pt;text-align:right' style="margin-top:0;margin-bottom:0">Php80,294</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:1.1pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Service</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">120,348</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">2,268</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">114,904</p>
 </td>
 <td   colspan=3 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">100,486</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">81,686</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">67,279</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:1.1pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Non-service</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">2,987</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">56</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">6,269</p>
 </td>
 <td   colspan=3 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">10,714</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">12,145</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">13,015</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: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">74,821</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">1,410</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">72,634</p>
 </td>
 <td   colspan=3 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">77,821</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">81,802</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">88,288</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:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">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">48,514</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">914</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">48,539</p>
 </td>
 <td   colspan=3 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">33,379</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">(7,994)</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:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">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   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   colspan=3 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=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>
 </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">263.81</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">4.97</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">266.73</p>
 </td>
 <td   colspan=3 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">179.04</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">(59.52)</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">255.15</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">4.81</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">252.20</p>
 </td>
 <td   colspan=3 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">165.37</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">(59.52)</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: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">40,603</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">765</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">28,101</p>
 </td>
 <td   colspan=3 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:5.75pt;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>
 </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: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   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   colspan=3 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=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>
 </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">217.84</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">4.11</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">146.32</p>
 </td>
 <td   colspan=3 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: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>
 </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">211.93</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">3.99</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">145.30</p>
 </td>
 <td   colspan=3 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:5.75pt;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>
 </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: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   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   colspan=3 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>
 </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: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">30,064</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">567</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">27,321</p>
 </td>
 <td   colspan=3 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">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>
 </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: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">269,220</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">5,074</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">279,041</p>
 </td>
 <td   colspan=3 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">276,362</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>
 </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: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">93,516</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">1,762</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">131,377</p>
 </td>
 <td   colspan=3 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">160,464</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>
 </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: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">112,313</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">2,117</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">159,455</p>
 </td>
 <td   colspan=3 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">186,407</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>
 </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: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">176,491</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">3,326</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">215,145</p>
 </td>
 <td   colspan=3 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">236,630</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>
 </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: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">79,595</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">1,500</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">48,079</p>
 </td>
 <td   colspan=3 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">24,746</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>
 </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: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   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   colspan=3 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>
 </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:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Depreciation and
 amortization </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">27,855</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">525</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">20,098</p>
 </td>
 <td   colspan=3 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">21,812</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>
 </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:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Ratio of earnings to fixed
 charges(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">5.7x</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">5.7x</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">4.1x</p>
 </td>
 <td   colspan=3 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">2.0x</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>
 </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: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">64,969</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">1,224</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">62,860</p>
 </td>
 <td   colspan=3 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">42,582</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">39,722</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">20,113</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: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">13,080</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">247</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">24,764</p>
 </td>
 <td   colspan=3 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">20,021</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>
 </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:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Net cash 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:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">48,159</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">908</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">30,078</p>
 </td>
 <td   colspan=3 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">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:8.65pt;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>
 </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: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">9,624</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">181</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   colspan=3 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>
 </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:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Dividends declared per
 common share(6)</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">56.00</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">1.06</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   colspan=3 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>
 </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>
 </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 peso.  For convenience, the peso financial information as at and for
the year ended December 31, 2005, has been translated into U.S. dollars at the
exchange rate of Php53.062 to US$1.00, the rate quoted through the Philippine
Dealing System as at December 31, 2005.  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='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>(2)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>In 2002 and 2001 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='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>(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='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>(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='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>(5)&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='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in' 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 these years.  In order to achieve a coverage ratio
of 1.0x, we would have had to generate additional consolidated earnings of
Php2,463 million and Php30,126 million for each of the years ended December 31,
2002 and 2001, respectively.</i></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' style="margin-top:0;margin-bottom:0"><i>(6)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>The most recent cash
dividend declaration made by PLDT on its common stock in 2005 was on November 8, 2005 at Php21 per common share to holders of record as at November 28, 2005 which was paid on December 28, 2005.  For more information, please see &#147;Dividends
Declared&#148; table below.</i></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="_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 at December 31, 2005, 2004 and 2003.</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:94.18%;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=5 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">2005</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>2004</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   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>2003</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=5 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">(in millions)</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   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:8.1pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10% Cumulative Convertible Preferred Stocks</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <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 5.4pt 0in 5.4pt;height:8.1pt'>
 <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 5.4pt 0in 5.4pt;height:8.1pt'>
 <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 5.4pt 0in 5.4pt;height:8.1pt'>
 <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 5.4pt 0in 5.4pt;height:8.1pt'>
 <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:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <p style='margin-left:22.5pt' style="margin-top:0;margin-bottom:0">A
 to EE</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php4,073</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php4,091</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php4,099</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p style='margin-left:27.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Series III</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <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;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:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='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:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p style='margin-left:27.0pt;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Convertible Preferred Stocks Subject to Mandatory
 Redemption</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='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='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='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='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p style='margin-left:27.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Series V(1)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <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;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:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">22</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='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;text-indent:-4.5pt' 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='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;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='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='text-align:right' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p style='margin-left:27.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Series VII(1)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.1pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Cumulative Non-convertible Redeemable Preferred Stock</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <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:8.1pt'>
 <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:8.1pt'>
 <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:8.1pt'>
 <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:8.1pt'>
 <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:8.1pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <p style='margin-left:27.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Series IV</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:8.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">360</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <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 5.4pt 0in 5.4pt;
 height:8.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">360</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <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 5.4pt 0in 5.4pt;
 height:8.1pt'>
 <p align=right style='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='text-align:right' style="margin-top:0;margin-bottom:0">Php4,517</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='text-align:right' style="margin-top:0;margin-bottom:0">Php4,604</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='text-align:right' style="margin-top:0;margin-bottom:0">Php4,616</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.1pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <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:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:8.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php904</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <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:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:8.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php851</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <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:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:8.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php847</p>
 </td>
 </tr>
</table></center></div>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779192"></a><a
name="_Toc46082251">___________</a></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(1)   Preferred stock subject to mandatory redemption
in 2008 and 2009 (see Note 14 &#150; Preferred Stock Subject to Mandatory Redemption
to the accompanying consolidated financial statements in Item 18 for further
discussion).</i></p>

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

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

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

<p style='text-indent:0in !msorm;text-indent:.5in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">The table sets forth dividend declarations
on shares of PLDT&#146;s common stock in 2005, which were the first cash dividend
declarations on shares of PLDT&#146;s common stock since April 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:96.16%;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'><a name="_Hlk116790513"></a>
 <p style='margin-top:3.0pt;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 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:2.9pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Date</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-top:3.0pt;margin-right:2.9pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Class</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Declaration </b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Record</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Payable</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Per Share</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;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;height:3.0pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <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;
 height:3.0pt'>
 <p align=right style='margin-top:0in;margin-right:0in;
 margin-bottom:1.0pt;margin-left:40.5pt;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;
 height:3.0pt'>
 <p align=right style='margin-top:0in;margin-right:0in;
 margin-bottom:1.0pt;margin-left:40.5pt;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;
 height:3.0pt'>
 <p align=right style='margin-top:0in;margin-right:0in;
 margin-bottom:1.0pt;margin-left:40.5pt;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;
 height:3.0pt'>
 <p align=right style='margin-top:0in;margin-right:0in;
 margin-bottom:1.0pt;margin-left:40.5pt;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;
 height:3.0pt'>
 <p align=center style='margin-bottom:1.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million pesos)</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='text-indent:9.0pt' 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=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=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:26.55pt;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;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0"><b>Common Stock</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' style="margin-top:0;margin-bottom:0">March 1, 2005</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">March 31, 2005</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">May 12, 2005</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">Php14.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right' style="margin-top:0;margin-bottom:0">2,384</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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">May 5, 2005</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">June 3, 2005</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">July 14, 2005</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">21.00</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right' style="margin-top:0;margin-bottom:0">3,598</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' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">November 8, 2005</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">November 28, 2005</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">December 28, 2005</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">21.00</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:26.55pt;text-align:right' style="margin-top:0;margin-bottom:0">3,642</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">In
addition, on February 27, 2006, PLDT declared cash dividend of Php28 per share
to common shareholders of record as of March 20, 2006 which was paid on April 20, 2006.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our
current policy is to declare and pay dividends taking into consideration the
interests of our shareholders as well as our working capital, capital expenditures
and debt servicing requirements.  Also taken into consideration are our ability
to meet loan covenant requirements and the required prior written consents of
certain creditors and preferred stockholders (for stock dividends), under
certain conditions, in the declaration and payment of dividends as discussed in
<i>Note 12 &#150; Interest-bearing Financial Liabilities </i>and <i>Note</i> <i>15 &#150;
Stockholders&#146; Equity</i> to the accompanying consolidated financial statements
in Item 18.  The retention of earnings is necessary to meet the funding
requirements of our business expansion and development programs.
Unappropriated retained earnings of PLDT include undistributed earnings
representing accumulated equity in the net earnings of our subsidiaries, which
are not available for distribution as dividends until received in the form of
dividends from such subsidiaries (see <i>Note 15 &#150; Stockholders&#146; Equity</i> to
the accompanying consolidated financial statements in Item 18).  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:8.0pt' 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 peso and U.S. dollars follows:</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:100.0%;border-collapse:collapse'>
 <tr style='height:8.65pt'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'><br
 clear=all style='page-break-before:always'>

 <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;height:8.65pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In Philippine Peso</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;height:8.65pt'>
 <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:9.75pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.75pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.75pt'>
 <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;
 height:9.75pt'>
 <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;height:9.75pt'>
 <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:8.65pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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:8.65pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">April 16</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.024</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style=';text-align:center;
 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;
 height:8.65pt'>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style=';text-align:center;
 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:8.65pt'>
 <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;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style=';text-align:center;
 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;
 height:8.65pt'>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;height:8.65pt'>
 <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:8.65pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">May 12</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14.00</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.264</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">July 14</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.396</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">December 28</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21.00</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.396</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2006 (through June 28, 2006)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">28.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.528</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-left:27.0pt;text-indent:-27.0pt' style="margin-top:0;margin-bottom:0">(<i>Note</i>:   <i>Dividends on PLDT's common stock
were declared and paid in Philippine peso.  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).</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"><a name="_Toc75779194"></a><a name="_Toc46082253">Exchange Rates</a></p>

<p style='line-height:8.0pt' 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</b><b>(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>High</b><b>(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>Low</b><b>(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:#E0E0E0;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:#E0E0E0;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">Php51.690</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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">Php51.009</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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">Php47.550</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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">Php55.013</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:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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</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">56.341</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">56.044</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">56.443</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">53.062</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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">55.085</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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">53.062</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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">56.321</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">2006 (through June 28, 2006)</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">53.514</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">52.039</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">50.963</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">53.514</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)   Highest exchange rate for the period.</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(3)   Lowest 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='margin-bottom: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 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</b><b>(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>High</b><b>(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>Low</b><b>(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">2005</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">Php53.062</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">Php55.085</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">Php53.062</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">Php56.321</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">2006</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">52.167</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">52.576</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">52.167</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">52.903</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">51.725</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">51.795</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">51.499</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">52.097</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">51.158</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">51.194</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">50.963</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">51.484</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">51.777</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">51.394</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">50.997</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">51.889</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">52.820</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">52.175</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">51.389</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">52.920</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">June
 (through June 28, 2006)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">53.514</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">53.152</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">52.694</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">53.514</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)   Highest exchange rate for the month.</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(3)   Lowest 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 Philippine peso amounts into U.S. dollars for your convenience.  Unless
otherwise specified, these conversions were made at the exchange rate as at December 31, 2005 of Php53.062 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 at June
28, 2006, the exchange rate quoted through the Philippine Dealing System was
Php53.514 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>We face competition from well-established
telecommunications operators and may face competition from new entrants that
may adversely affect our business, results of operations, financial condition
and prospects</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 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, seven international gateway facility providers and five cellular
service providers in the country.  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 data and other network services
segments.  We cannot assure you that the
number of providers of telecommunication services will not further 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-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Competition in the cellular telecommunications industry in the Philippines is based primarily on factors such as network coverage, quality of service and
price.  Recently, competition has increased as operators sought to develop and
maintain market shares and to attract new subscribers.  Our principal cellular
competitors, Globe Telecom, Inc., or Globe, and Digitel Telecommunications
Philippines, Inc., or Digitel, through its cellular service, <i>Sun Cellular, </i>have
introduced aggressive marketing campaigns and promotions.  In the future, the
government may allocate further frequencies and award additional cellular
telecommunications licenses, which would further increase competition.</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 a result of competitive pressures, Smart has not
increased its cellular rates since November 1998.  Moreover, the level of
competition requires Smart to continuously innovate its products and to conduct
promotions, which may affect its cellular revenues and revenue growth.  For
example, in order to test the market demand for fixed rate or &#147;bucket&#148; plans
for voice and text services and in response to similar types of promotions
launched by its competitors, Smart launched in March 2005 the <i>Smart 258 Unlimited
Call and Text</i> promotions pursuant to which Smart and <i>Talk &#145;N Text</i>
prepaid subscribers had the option to avail themselves of unlimited on-network
(Smart-to-Smart) voice calls or unlimited on-network (Smart-to-Smart) text
messages at a fixed rate. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In June 2005, Globe was awarded a license by the NTC to
install fixed lines nationwide.  The expanded franchise allows Globe to
increase its fixed line coverage which was previously limited by its designated
service areas.  In addition, Globe and other fixed line operators, such as
Digitel and Bayan Telecommunications Philippines, Inc., or Bayantel, have
recently become more aggressive in lowering rates for national long distance
calls, international long distance calls and other data services including DSL.
We have likewise introduced promotions and new pricing plans which effectively
lower the prices for international long distance calls and DSL.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In December 2005, the NTC awarded licenses covering third
generation, or 3G, cellular services to existing cellular operators Smart,
Globe, Digitel and to a new entrant, Connectivity Unlimited Resources
Enterprises, or CURE.  The recent introduction of 3G cellular services in the Philippines may also lead to increased competition and may require Smart to incur additional
marketing expenses in order to compete more effectively against the other 3G
operators.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">There can be no
assurance that incurring additional marketing expenses for these promotions and
responding to rate pressures and the potential loss of customers will not have
a material adverse effect on our financial performance.</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">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</h5>

<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
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.  Furthermore, in 2005, the NTC
issued the licenses covering 3G cellular services to four operators, including Smart,
and we have made significant expenses in the roll out of these services.  We
are also currently upgrading to a next generation, all-IP, network and rolling
out a wireless broadband network in order to expand our capability to provide
broadband services.  These projects require significant capital expenditures over
the next few years.</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">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 may be unable to obtain
new technologies on a timely basis or on satisfactory terms or implement them
in an appropriate or effective manner.  Future development of new technologies,
services or standards could require significant changes to our business model
which could necessitate new investments.  In addition, new products and services
may be expensive to develop and may result in increased competition.  Such
strategic initiatives and technological developments could require us to incur
significant additional capital expenditures.  There can be no assurance that we
would be able to adopt and successfully implement new technologies.  In
addition, there can be no assurance on how emerging and future technological
changes will affect our operations or the competitiveness of our services.</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>Our results of operations
have been, and may continue to be, adversely affected by competition in
international long distance service</i></p>

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

<p 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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">We
anticipate that revenues from international long distance and international
data services, including our services, will continue to decline in the future,
due primarily to:</p>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
increased
competition from other domestic and international telecommunications services providers;</p>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' 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='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
alternative
providers offering Internet telephony, or VoIP, and broadband capacity; and </p>

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

<p align=left style='margin-top:0in;margin-right:0in;
margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;text-align:left;
text-indent:-.25in;page-break-after:auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
unauthorized
traffic termination and bypass routings by international simple resale
operators.</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">We
cannot assure you that these declines will not materially and adversely affect
our financial performance.</p>

<p 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='text-indent:.5in;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 debt instruments contain restrictive covenants which require us to
maintain certain financial tests and our substantial indebtedness could impair
our ability to fulfill our financial obligations, service our other debt and
carry out new financings or pay dividends</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">As at December 31, 2005, we had consolidated total indebtedness of approximately Php112,313 million (US$2,117
million), and a consolidated ratio of debt to equity (total debt on a
consolidated basis divided by total equity) of 1.41x.  Our existing debt instruments
contain 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; Debt 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 align=left style='margin-top:0in;margin-right:0in;
margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;text-align:left;
text-indent:-.25in;page-break-after:auto' 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="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='margin-top:0in;margin-right:0in;
margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;text-align:left;
text-indent:-.25in;page-break-after:auto' 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;</p>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
limit our
ability to incur capital expenditure; and</p>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
limit the
availability and amount of dividend payments to our common shareholders.</p>

<p style='line-height:7.0pt' 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">The
principal factors that can negatively affect our ability to comply with the
financial ratios and other financial tests under our debt instruments are
depreciation of the peso relative to the U.S. dollar, poor operating
performance of PLDT and our consolidated subsidiaries, impairment or similar
charges in respect of investments of other long-lived assets that may be
recognized by PLDT and its consolidated subsidiaries and increases in our
interest expense.  Since approximately 98% of our total debts were 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.
The peso has been subject to significant fluctuations in recent years.  From
2002 to 2004, the peso has generally been depreciating from a high of Php49.336
on May 20, 2002 to a low of Php56.443 on October 14, 2004.  In 2005, the peso fluctuated significantly from a low of Php56.321 on July 8 to a high of
Php53.062 on December 29.  While the peso appreciated as at December 31, 2005,
we cannot assure you that the peso will not depreciate and be subject to
significant fluctuations 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">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 the financial
ratios, we may be unable to maintain compliance with these ratios and covenants
or be unable to incur new debt.  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-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='text-indent:.5in' style="margin-top:0;margin-bottom:0">In
addition, we may have difficulty meeting debt payment obligations if we do not
continue to receive cash dividends from Smart.</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"><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 operating 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 since
December 2002, 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="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 the
indebtedness we hold. </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 businesses require substantial capital investment, which we may not
be able to finance</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">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 2005 and 2004 totaled
Php15,864 million and Php19,268 million, respectively.  Our 2006 budget for
consolidated capital expenditures is approximately Php19,759 million, of which
approximately Php9,300 million is budgeted to be spent by PLDT, approximately
Php8,635 million is budgeted to be spent by Smart and the balance represents the
budgeted capital spending of our other subsidiaries.  PLDT&#146;s capital spending
is intended principally to finance the continued build-out and upgrade of its
data and Internet protocol infrastructures and for its fixed line data services
and the maintenance of its network. <b> </b>Smart&#146;s capital spending is focused
on expanding and upgrading its transmission network facilities 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. <b>  </b></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"><i>Our financial position could be materially and adversely affected if
the peso significantly fluctuates against the U.S. dollar</i></p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
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 expenses are denominated in U.S. dollars and other foreign
currencies, but a significant portion of our revenues is denominated in pesos.
As at December 31, 2005, 98% of our total consolidated indebtedness was
denominated in U.S. dollars and other foreign currencies.  As at December 31, 2005, approximately 53% of our consolidated debts were unhedged.  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='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">On the other hand,
approximately 35% of our consolidated service revenues are either denominated
in U.S. dollars or is linked to the U.S. dollar.  In this respect, an
appreciation of the peso against the U.S. dollar reduces our revenues in peso
terms and reduces our cash flow from operations.  </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 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 Php56.341 to US$1.00 as at December 31, 2004 but appreciated to Php53.062 to US$1.00 as at December 31, 2005.  The peso has also been subject to significant fluctuations.  The peso declined by
approximately 1% against the U.S. dollar to Php56.341 to US$1.00 as at December 31, 2004 from Php55.586 to US$1.00 as at December 31, 2003 and appreciated by approximately 6% against the U.S. dollar to Php53.062 to US$1.00 as at December 31, 2005 from 56.341 to US$1.00 as at December 31, 2004.  In 2005, the peso appreciated to a high of Php53.062 on December 29, 2005 after depreciating to a low of Php56.321 on July 8, 2005.  While the peso appreciated as at December 31,
2005, we cannot assure you that the peso will not depreciate and be subject to
significant fluctuations going forward.</p>

<p style='text-indent:.5in;line-height:8.0pt' 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 peso may again be subject to significant
fluctuations and may depreciate due to a range of factors, including:</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.75in;page-break-after:avoid' 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-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.75in' 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-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.75in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any interest rate
increases by the Federal Reserve Bank of the United States;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.75in' 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-top:0in;margin-right:0in;margin-bottom:
0in;margin-left:.75in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
foreign exchange
traders 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>The cellular telecommunications industry may not continue to grow</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' style="margin-top:0;margin-bottom:0">The majority of our consolidated revenues is currently derived from
cellular services.  As a result, we depend on the continued development and
growth of the cellular telecommunications industry.  The cellular penetration
rate in the Philippines is estimated to have reached approximately 41%.  As
such, our cellular business is expected to grow at a slower rate as penetration
rate increases and Smart moves further into the lower-income segments of the Philippine
cellular services market.  Growth of the cellular services market depends on
many factors beyond our control, including the continued introduction of new
and enhanced cellular devices, the price levels of cellular handsets, consumer
preferences and the amounts of disposable income of existing and potential
subscribers.  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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">Our businesses depend on the reliability of our network infrastructure,
which is subject to physical, technological and other risks</h5>

<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">We depend to a significant degree on an uninterrupted
operation of our network to provide our services.  We also depend on robust
information technology systems to enable us to conduct our operations.  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='margin-bottom:0in;margin-bottom:.0001pt;
line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
physical
damage;</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-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
power loss;</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-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
capacity
limitation;</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-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
cable theft;</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-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
software
defects; and</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-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' 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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">While we are taking initiatives
to prevent and/or mitigate the occurrence of the above risks including the
preparation of a disaster recovery plan that aims to allow restoration of
service at the soonest possible time from occurrence of an accident, we cannot
assure you that the occurrence of any of these risks will not have a material
and adverse effect on our ability to provide services to our customers.</p>

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

<p style="margin-top:0;margin-bottom:0"><i>A significant number of
PLDT&#146;s shares are held by three 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 31.36% of PLDT&#146;s common stock as at December 31, 2005.  This is the largest block of PLDT&#146;s common stock that is directly or
indirectly under common ownership.  NTT Communications, which owned 14% of
PLDT&#146;s common stock as at December 31, 2005, transferred on March 14, 2006 approximately 12.6 million shares of PLDT&#146;s common stock, representing approximately
7% of the outstanding shares of PLDT&#146;s common stock, to DoCoMo pursuant to a
stock sale and purchase agreement dated January 31, 2006.  NTT Communications is a wholly-owned subsidiary, and DoCoMo a majority-owned subsidiary of NTT.  In
connection with this transaction, First Pacific and certain of its affiliates,
or the FP Parties, NTT Communications, DoCoMo and PLDT entered into a Cooperation
Agreement, dated January 31, 2006, or the Cooperation Agreement, pursuant to
which, among other things, certain rights of NTT Communications under the Stock
Purchase and Strategic Investment Agreement dated September 28, 1999 and the
Shareholders Agreement dated March 24, 2000 were extended to DoCoMo.  As a
result, NTT Communications and DoCoMo, in coordination with each other, have
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:7.0pt' 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 all investments for the previous 12 months is greater than US$25
million in the case of all investments to any existing investees and US$100
million in the case of all investments to any new or existing investees,
determined on a rolling monthly basis;</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;
any investments in a specific
investee, if the cumulative value of all investments made by us 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:7.0pt' 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:7.0pt' 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:7.0pt' 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: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 provision of financial support
to Piltel in excess of that remaining available under the PLDT Letter of
Support, or LOS.</p>

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

<p style="margin-top:0;margin-bottom:0">Moreover, as a result of the
Shareholders Agreement, the Cooperation Agreement and their respective
stockholdings, the FP Parties, NTT Communications and/or DoCoMo are able to
influence our actions and corporate governance, including:</p>

<p style='text-indent:.5in;line-height:7.0pt' 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;
elections of PLDT&#146;s directors; 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;
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">The FP Parties, NTT
Communications and/or DoCoMo 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">&nbsp;</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 PLDT to
make an offer to purchase or prepay its outstanding debt under its US$100
million 10.625% notes due 2007 and its US$250 million 11.375% notes due 2012,
its 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 may
result in a default under certain of Smart&#146;s loan agreements.  As at <br>
December 31, 2005, Php18,234 million in principal amount of PLDT&#146;s indebtedness
is directly subject to a change in control, offer to purchase or prepay
requirement and Php3,867 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
PLDT fails to complete a required change in control offer to purchase or prepay
the affected debts, all of its debt could become immediately due and payable as
a result of various cross-default provisions.  </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 due to its failure to conduct a
public offering of its shares </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">Smart has publicly
stated that it believes that it had 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, or R.A. No. 7925.  As
Smart has not conducted a public offering
of its shares, the Philippine
Congress may revoke the franchise of Smart for its failure to comply with the
requirement under R.A. 7925 on the public offering of its shares.  A quo
warranto 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.  In September 2004, Senate Bill No. 1675 was
filed seeking to amend Section 21 of R.A. 7925.  The bill seeks to declare that
a telecommunications entity shall be deemed to have complied with the
requirement of making a public offering of its shares if two-thirds of its
outstanding voting stock are owned and controlled, directly or indirectly, by a
listed company.  The bill is currently pending in the Philippine Senate.  However, we cannot assure you that such
bill will be enacted and that the franchise of Smart will not be revoked due to
Smart&#146;s failure to timely conduct a public offering of its 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"><a name="OLE_LINK18"></a><a
name="OLE_LINK17"><i>Our business is
significantly affected by governmental laws and regulations, including
regulations in respect of our franchises, rates and taxes</i></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">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 Item 4. &#147;Information on the Company &#150; Licenses
and Regulation.&#148;</p>

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

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In
the first quarter of 2005, House Bill No. 926 was filed and is now pending in
the House of Representatives of the Philippines.  The&nbsp;proposed bill
provides for the cancellation of the currency exchange rate mechanism pursuant
to which utility companies, including us, are permitted to adjust our monthly
local exchage service rates according to changes in the peso-to-U.S. dollar
exchange rate.  If this bill is passed into law or if the NTC issues guidelines
to change the basis of the currency exchange rate mechanism, our ability to
generate U.S. dollar linked revenues from our local exchange business could be
adversely affected.  A decline in our foreign currency-linked revenues could
increase our exposure to risks from declines in the value of the Philippine
peso against the U.S. dollar.</p>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">We are also subject to a
number of national and local taxes. &nbsp;On May 24, 2005, the President signed into law Republic Act No. 9337, or R.A. 9337, amending certain sections of
the National Internal Revenue Code which became effective on November 1, 2005.  In particular, the following amendments may negatively impact our profitability:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:6.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
increase of the
income tax rate for corporations from 32% to 35% effective November 1, 2005;</p>

<p style='margin-bottom:6.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
increase in
value-added tax, or VAT, rate from 10% to 12% effective February 1, 2006; </p>

<p style='margin-bottom:6.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
limited claim of
input tax credits to 70% of output tax; and</p>

<p style='margin-bottom:6.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
input tax on capital
goods spread evenly over 5 years or estimated useful life, whichever is
shorter.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">There can be no assurance
that the increase in taxes will not have a material adverse effect on our revenues,
profitability and cash flows. &nbsp;In addition, there can be no assurance that
we will not be subject to new and/or additional taxes and that we will be able
to impose additional charges or fees on our customers to compensate for the
imposition of such taxes. </p>

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

<p style='text-indent:.5in;punctuation-wrap:hanging;text-autospace:
ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">Moreover, the
Philippine Congress is considering five bills which were filed prior to the
signing into law of R. A. 9337.  Each of the proposed bill, 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.  In addition, several bills have also been submitted for
consideration by Congress, each of which, if passed by Congress and enacted
into law, would impose a franchise tax at a rate of 7% or 5% tax on gross
receipts of all telecommunications companies in lieu of the currently
applicable 10% VAT.  We cannot assure you that we would be able to impose
additional charges or fees to compensate for the imposition of such taxes.</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 existing regulations and introduce new regulations which
may result in increased competition and 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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">On
 June 16, 2000, the NTC issued Memorandum Circular No. 13-6-2000 proposing that cellular operators, including Smart and Piltel, be required, among other
things:</p>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' 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-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' 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-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' 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="margin-top:0;margin-bottom:0">&nbsp;</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 this
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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">In December 2005, the NTC issued a consultative
document on the development of competition policy framework for the information
communications sector.  The consultative paper contains 11 questions which
cover the following key areas:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
a review of market trends deemed to impinge on current and future
state of competition in the sector;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
an exploration of major policies that may change the balance of
market power, hence the nature and degree of competition;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
an assessment of the quality of current regulation, identifying
major handicaps of the NTC; and</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
a discussion of the urgent tasks for the NTC to effectively
govern a dynamic and complex industry.</p>

<p style='margin-left:0in;text-indent:0in' 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 NTC invited
public comment from industry stakeholders and other interested parties in
relation to the issues raised in the paper.  On January 31, 2006, PLDT submitted a comprehensive response to the consultative paper.&nbsp; </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">There
can be no assurance that the NTC will not impose changes to the current
regulatory framework which may lead to increased competition.  Any such changes
may have an adverse effect on PLDT&#146;s business, results of operations and
prospects.</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>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-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' 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, which are being undertaken.  The installation and
maintenance of these facilities and equipment are subject to risks and
uncertainties relating to:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:7.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right: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;
shortages of
equipment, materials and labor;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:7.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' 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-bottom:0in;margin-bottom:.0001pt;
line-height:7.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' 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-bottom:0in;margin-bottom:.0001pt;
line-height:7.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' 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-bottom:0in;margin-bottom:.0001pt;
line-height:7.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
unanticipated
cost increases.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:7.0pt;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">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 and adverse
effect on our results of operations and financial condition.</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>Failure to achieve and maintain effective internal
control over financial reporting in accordance with Section</i><i> 404 of the
Sarbanes-Oxley Act of 2002 could
adversely impact investor confidence and the market price of our common shares
and ADSs </i></p>

<p style='text-indent:24.5pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002, beginning with our Annual Report on Form 20-F for
the fiscal year ending December 31,
2006, we will be required to include a report by our management on our internal
control over financial reporting in our Annual Reports on Form 20-F that
contains an assessment by management of the effectiveness of our internal
control over financial reporting.  In
addition, our independent registered public accounting firm must attest to and
report on management&#146;s assessment of the effectiveness of our internal control
over financial reporting. </p>

<p style='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 cannot assure you as to our management&#146;s, or our
independent registered public accounting firm&#146;s, conclusion as of December 31, 2006 with
respect to the effectiveness of our internal control over financing reporting.
There is a risk that neither our management nor our independent registered
public accounting firm will be able to conclude as of December 31, 2006 that our internal control over
financial reporting is effective.  Even
if our management concludes that our internal control over financial reporting
is effective, our independent registered public accounting firm may disagree.  If our independent registered public accounting
firm is not satisfied with our internal control over financial reporting or the
level at which our internal control over financial reporting is documented,
designed, operated or reviewed, or if the independent registered public
accounting firm interprets the requirements, rules or regulations differently
from us, then it may decline to attest to our management&#146;s assessment or may
issue an adverse opinion.  Any of
these possible outcomes could result in an adverse reaction in the financial
marketplace due to a loss of investor confidence in the reliability of our
consolidated financial statements, which ultimately could negatively impact the
market prices of our common shares and ADSs. </p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Moreover, internal control over financial reporting
may not prevent or detect misstatements because of its inherent limitations,
including the possibility of human error, the circumvention or overriding of
controls, or fraud. Therefore, even effective internal control over financial
reporting can provide only reasonable assurance with respect to the preparation
and fair presentation of financial statements.  If we fail to
maintain the adequacy of our internal control over financial reporting,
including any failure to implement required new or improved controls, or if we
experience difficulties in their implementation, our business and operating
results could be harmed, we could fail to meet our reporting obligations and
there could be a material adverse effect on the market prices of our common
shares and ADSs.</p>

<p style='line-height:normal !msorm;margin:0in;margin-bottom:.0001pt;
line-height:10.0pt;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"><i>We may not be successful
in our acquisitions of and investments in other companies and businesses, and
may therefore be unable to implement fully our business strategy </i></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 growth strategy, we may from time to time make acquisitions and
investments in companies or businesses, which may or may not be significant.
The success of our acquisitions and investments depends on a number of factors,
including:</p>

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

<ul style='margin-top:0in' type=disc>
 <li style='margin-left:.5in !msorm;text-indent:-.25in !msorm;
 line-height:normal !msorm;line-height:14.0pt;punctuation-wrap:hanging;
 text-autospace:ideograph-numeric ideograph-other'>our ability to identify suitable opportunities for investment or
 acquisition; </li>
 <li style='margin-left:.5in !msorm;text-indent:-.25in !msorm;
 line-height:normal !msorm;line-height:14.0pt;punctuation-wrap:hanging;
 text-autospace:ideograph-numeric ideograph-other'>our ability to reach an acquisition or investment agreement on
 terms that are satisfactory to us or at all; </li>
 <li style='margin-left:.5in !msorm;text-indent:-.25in !msorm;
 line-height:normal !msorm;line-height:14.0pt;punctuation-wrap:hanging;
 text-autospace:ideograph-numeric ideograph-other'>the extent to which we are able to exercise control over the
 acquired company; </li>
 <li style='margin-left:.5in !msorm;text-indent:-.25in !msorm;
 line-height:normal !msorm;line-height:14.0pt;punctuation-wrap:hanging;
 text-autospace:ideograph-numeric ideograph-other'>the economic, business or other strategic objectives and goals of
 the acquired company compared to those of ours; and </li>
 <li style='margin-left:.5in !msorm;text-indent:-.25in !msorm;
 line-height:normal !msorm;line-height:14.0pt;punctuation-wrap:hanging;
 text-autospace:ideograph-numeric ideograph-other'>our ability to successfully integrate the acquired company or
 business with us. </li>
</ul>

<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">Any of our contemplated acquisitions and investments
may not be consummated due to reasons or factors beyond our control.  Even if
any contemplated acquisitions and investments are consummated, we may not be
able to realize any or all of the anticipated benefits of such acquisitions and
investments.  Moreover, if we are unsuccessful in our contemplated acquisitions
and investments, we may not be able to implement fully our business strategy to
maintain or grow certain of our businesses.</p>

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

<p style="margin-top:0;margin-bottom:0"><b><i>Risks Relating to the Philippines</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"><i>PLDT&#146;s business may be
affected by political or social or economic instability in the Philippines</i></p>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">On May 10, 2004, the Philippines held a presidential election which resulted in a victory by the
incumbent President Arroyo who successfully retained her post.  Shortly after
the elections, allegations of irregularities in the presidential elections,
such as stolen ballots and vote buying intensified.  The Philippine Congress
commenced an inquiry into a wire tapped audio tape which contains a
conversation allegedly between President Gloria Macapagal-Arroyo and a
commissioner of the Commission on Elections discussing the vote count on the
presidential election. On June 27, 2005, President Gloria Macapagal-Arroyo
publicly stated that she did speak to a commissioner of the Commission on
Elections in order to protect her votes, but not to influence the outcome of
the election.  Impeachment complaints based on allegations of culpable
violation of the Constitution, graft and corruption and betrayal of public
trust were filed against President Arroyo with the Philippine Congress.  On
September 6, 2005, the Philippine Congress voted to reject the impeachment
complaints against President Arroyo.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">Recently, coup d&#146;etat
attempts against the administration of President Arroyo have been reported.  On
February 24, 2006, President Arroyo declared a state of emergency allowing for
warrantless arrests and a temporary take-over of privately-owned utility
companies.  On March 3, 2006, President Arroyo lifted the state of emergency.</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;text-indent:
..5in' style="margin-top:0;margin-bottom:0">The Philippines has also experienced periods of slow growth, high inflation and significant devaluation
of the peso.  The Philippine government is also facing a fiscal deficit which
it is aiming to eliminate by 2008 by implementing a number of economic
reforms.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;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
fiscal deficit position of the Philippine government and the ongoing political
uncertainty has resulted in increased concerns about the political and economic
stability of the country.  This, in turn, has resulted in the volatility of the
peso against the dollar.  There can be no assurance 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>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='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 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="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 and adversely affect
our ability to obtain foreign currency to service our foreign currency
obligations.</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 occurrence of natural catastrophes may materially disrupt our
operations</i></p>

<p style='line-height:9.0pt;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 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.  There can be no assurance that the insurance coverage PLDT
maintains for these risks will adequately compensate it for all damages and
economic losses resulting from natural catastrophes.</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="_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="margin-top:0;margin-bottom:0"><a name="_Toc75779197"></a><a name="_Toc46082256">Overview</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">We
are the leading national telecommunications services provider in the Philippines.  Through our three principal business groups &#151; wireless, fixed line, and
information and communications technology, or ICT, we offer a wide range of
telecommunications services to over 22 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 services provider in the Philippines with
approximately 62% of the total reported fixed lines in service nationwide as at
 December 31, 2005.  Smart, our wholly-owned subsidiary, is the leading
cellular services provider in the country, with approximately 45% of total
reported cellular subscribers as at December 31, 2005.  Piltel, Smart&#146;s 92.1%-owned subsidiary, had approximately 14% of total reported cellular subscribers
as at December 31, 2005.  Our involvement in the ICT sectors are primarily
through our equity interests in various entities, including <i>ePLDT Ventus</i>,
a wholly-owned subsidiary of ePLDT carrying the umbrella brand for our call
center business 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 and
traded on the Philippine Stock Exchange, or PSE, and our American Depositary
Shares evidenced by American Depositary Receipts, or ADRs, are listed and
traded on the New York Stock Exchange in the United States.  We had a market
capitalization of approximately Php359,140 million (US$6,799 million) as at May 31, 200 6, representing one of the largest market capitalizations among
Philippine-listed companies.  For the year ended December 31, 2005, we had
consolidated operating revenues of Php123,335 million (US$2,324 million). </p>

<p 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) 816-8556.
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">&nbsp;</p>

<p style='page-break-after:avoid' 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.  In 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.  On March 14, 2006, DoCoMo acquired from NTT Communications approximately
7% of PLDT&#146;s outstanding common shares, with NTT Communications retaining
ownership of approximately 7% of PLDT&#146;s common shares.</p>

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

<p style="margin-top:0;margin-bottom:0">PLDT&#146;s original franchise was
granted in 1928 for an initial period of 50 years and was subsequently 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.  </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 2,193,525 common and preferred shareholders of record as at December 31, 2005.  Approximately 2,176,980 of these shareholders are Philippine persons
representing approximately 86% 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">Our consolidated capital
expenditures amounted to Php15,864 million, Php19,268 million and <br>
Php17,943 million in 2005, 2004 and 2003, respectively.  Of these amounts, Php6,389
million, Php3,917 million and Php6,100 million were attributable to PLDT for
2005, 2004 and 2003, respectively, while Php8,785 million, Php14,721 million
and Php11,305 million were spent by Smart for 2005, 2004 and 2003,
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">As at May 31, 2006,
our three largest shareholders were 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
owned 31.36% of our common shares, NTT Communications, a wholly-owned
subsidiary of NTT of Japan, which beneficially owned approximately 7% of our
common shares, and DoCoMo, a majority-owned subsidiary of NTT, which owned approximately
7% of PLDT&#146;s common shares following its acquisition of such equity interest in PLDT from NTT
Communications on March 14, 2006 which reduced NTT Communications&#146; ownership in
PLDT&#146;s common shares from approximately 14% to approximately 7%.</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='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:6.3pt'>
 <td   rowspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:6.3pt'>
 <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;height:6.3pt'>
 <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=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:6.3pt'>
 <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>2005</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>2004</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">2003</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:#F3F3F3;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:#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=bottom style=' background:#E0E0E0;
 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:#E0E0E0;
 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:#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">100.0</p>
 </td>
 <td   valign=bottom 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">100.0</p>
 </td>
 <td   valign=bottom 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">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;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:#F3F3F3;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:#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">94.4</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">94.4</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">94.4</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;
 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:#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">100.0</p>
 </td>
 <td   valign=bottom 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">100.0</p>
 </td>
 <td   valign=bottom 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">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">Mabuhay Satellite</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 communications 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">67.0</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">67.0</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">67.0</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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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=bottom style=' background:#E0E0E0;
 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=bottom style=' background:#E0E0E0;
 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=bottom style=' background:#E0E0E0;
 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>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <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:#E0E0E0;
 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">100.0</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">100.0</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <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:#E0E0E0;
 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">Data and network services</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">100.0</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">100.0</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <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:#E0E0E0;
 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">Telecommunications services</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">97.5</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">97.5</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">97.5</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:15.0pt;text-indent:-15.0pt;page-break-after:
 avoid' 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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">75.0</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">75.0</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">75.0</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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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=bottom style=' background:#E0E0E0;
 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=bottom style=' background:#E0E0E0;
 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=bottom style=' background:#E0E0E0;
 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>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <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=top style=' background:#E0E0E0;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">100.0</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='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 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">100.0</p>
 </td>
 </tr>
</table></center></div>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:.25in;
line-height:normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
text-indent:.5in;page-break-after:auto' style="margin-top:0;margin-bottom:0">On
September 2, 2004, Smart entered into a sale and purchase agreement to acquire
100% of Smart Broadband, a company primarily engaged in providing wireless
broadband and data services to small and medium-scale enterprises in the
Philippines, for a total consideration of US$45 million of which payments of
US$11 million and US$7 million were made in 2004 and US$4 million in January
2005; the balance of US$23 million was paid on March 7, 2006.  The acquisition
aims to strengthen Smart&#146;s position in the wireless data segment and is in line
with Smart&#146;s overall strategy of providing the widest range of innovative
wireless 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">On
 July 2, 2004, Smart and PLDT entered into a deed of sale of shares under which
Smart acquired from PLDT approximately 59.3 million shares of Piltel Class I,
Series K Convertible Preferred Stock for approximately Php2,066 million.  Smart
converted 4.825 million of said shares into approximately 820.250 million Piltel
common shares on July 9, 2004 and the balance of 54,467,720 shares were
converted into 9,259,512,400 Piltel common shares on December 23, 2004.  On April 25, 2005, PLDT and Smart entered into a subscription and assignment
agreement under which PLDT assigned and transferred to Smart all of its 767
million shares of Piltel common stock in exchange for 11 million of Smart's
preferred shares.  As a result of the foregoing transactions, Smart's
shareholdings in Piltel now represent 92.1% of Piltel's outstanding common
shares and PLDT ceased to own any shares of Piltel's common stock.</p>

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

<p style="margin-top:0;margin-bottom:0">On May 25, 2006, we announced that ePLDT and SPI Tech, L.P. entered
into a non-binding letter of interest in respect of a potential acquisition by
ePLDT of 100% of SPI Technologies, Inc., or SPI, one of the leading
pure-play business process outsourcing, or BPO, companies and independent BPO
service providers in the world.  We currently expect to use internally
generated cash funds to finance the possible acquisition by ePLDT of SPI.  We
believe that the possible acquisition of SPI would solidify ePLDT&#146;s position as
one of the largest full service BPO companies.  However, there is no
obligation on the parties to negotiate definitive transaction documents and there is no
assurance whether and on which terms the possible acquisition of SPI will be
implemented and, if implemented, whether we will be able to realize any or
all of the currently anticipated benefits of such acquisition.</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>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, wireless
broadband and other services through our various subsidiaries in the wireless
business segment.  Revenues from our wireless business accounted for 59%, 59%
and 57% of our total operating revenues for the years ended December 31, 2005,
2004 and 2003, respectively.  In 2005, 2004 and 2003, cellular service revenues
accounted for 96%, 97% and 97%, respectively, of our wireless business service
revenues. </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">We
provide cellular services (including handset sales), through Smart and its
subsidiary, Piltel.  Smart is the leading cellular services provider in the Philippines, with 15,424,196 subscribers as at December 31, 2005, representing an estimated market share of approximately 45%.  Piltel, a reseller of Smart's GSM network
with its own branding, had 4,984,425 subscribers as at December 31, 2005, representing an estimated market share of approximately 14%.  In 2005, the combined
number of Smart's and Piltel's subscribers increased by 1,200,389, or 6%, to
20,408,621.  As at December 31, 2005, cellular penetration in the Philippines reached approximately 41%, which was nearly ten times the country's fixed line
penetration, although the existence of subscribers owning multiple SIMs has
likely overstated this penetration rate to a certain extent.</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 services.  Approximately 99% of Smart&#146;s and all of Piltel&#146;s cellular
subscribers were prepaid as at December 31, 2005.  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.  Text
messaging 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 2005, our text messaging systems handled
over 43,586 million standard outbound text messages with another 52,374 million
messages generated by the unlimited text offerings.  This compares to 40,953
million standard outbound text messages in 2004; unlimited text services were
not yet available in 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">Smart's
Nokia-provided cellular network is the most extensive in the Philippines, covering substantially all of Metro Manila and most of the other major population
centers in the Philippines.  Its dual-band GSM network allows it to deploy high
capacity 1800 MHz base transceiver stations, or BTS, in dense urban areas while
its 900 MHz BTS can be much more economically deployed in less densely
populated provincial areas.  With 5,982 GSM base stations as of the end of
December 2005, Smart&#146;s cellular network covers approximately 82% of all towns
and municipalities in the Philippines, accounting for over 99% of the
population.  Piltel&#146;s services are also supported on the network.</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>Fixed Line</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">We
are the leading fixed line operator in the Philippines.  Our fixed line
business group offers local exchange, international long distance, national
long distance, data and other network and miscellaneous services.  We had approximately
2.1 million fixed lines in service as at December 31, 2005.  Revenues from our fixed line services accounted for 40% of our consolidated operating revenues
in 2005.</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">Our
5,400-kilometer long digital fiber optic backbone is supported by an extensive
digital microwave backbone.  We are in the process of installing an additional
1,000-kilometer fiber optic link to accommodate the increasing demand for
higher-capacity voice, data and video services.  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'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='text-indent:.5in' style="margin-top:0;margin-bottom:0">Through
our wholly-owned subsidiary, ePLDT, we provide broad-based integrated ICT
services focusing on infrastructure and services for Internet applications,
Internet protocol-based solutions and multimedia content delivery.  ePLDT's
principal activities are the operation of an Internet data center under the
brand name <i>Vitro&#153;</i>, call center and Internet and gaming businesses.  As
the newest business in the PLDT group, revenues from our ICT services accounted
for approximately 3% of our total operating revenues in 2005.</p>

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

<p style="margin-top:0;margin-bottom:0"><a name="OLE_LINK20"></a><a name="OLE_LINK19"></a><a
name="_Toc75779200"></a><a name="_Toc46082259">Strengths</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">We
believe our business is characterized by the following competitive strengths:</p>

<p style='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;
<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 over 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's <i>Talk &#145;N Text</i>
brand, which is provided using Smart&#146;s 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 22
million fixed line and cellular subscribers as at December 31, 2005, we have the leading market position in both fixed line and cellular markets 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 cellular service in the country, approximately 62%
of our consolidated operating revenues in 2005 were derived from our wireless
business segment.  Fixed line revenues, which represented 40% of our consolidated
operating revenues in 2005 and 2004, have remained stable over the past three
years despite pressures on traditional fixed line voice revenues, resulting
from increases in our fixed line data and other network services.  We continue
to identify and develop new revenue sources from our cellular, 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.  In addition, we have
commenced upgrading of our fixed line network to Next Generation Network, or NGN,
and the rolling out of 3G and wireless broadband in order to increase broadband
subscribers, and expand our data/broadband capabilities.</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 </i>and<i>
Pasa Load.</i>  <i>Smart Load</i> is an &#147;over-the-air&#148; electronic loading
facility designed to make reloading of air time credits more convenient for,
and accessible, to consumers.  <i>Pasa Load </i>(the term &#147;pasa&#148; means
&#147;transfer&#148; in the vernacular), is a derivative service of <i>Smart Load</i>
that 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
important strategic relationships with NTT Communications, DoCoMo 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 fixed line and wireless businesses</i>.  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.  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' use of our network for both voice and data, as well as their
reliance on our services.  We are currently upgrading our fixed line facilities
to a NGN and also rolling out a 3G network based on a W-CDMA technology as well
as expanding our DSL and wireless broadband facilities.  Our operating target
is to continue growth in profitability by increasing our revenues while
controlling our costs.</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.  In addition, we are currently developing convergent
products which feature the combined benefits of providing voice and data, and
fixed line, wireless and ICT services utilizing our network and business
platforms.  We are also lowering our costs by integrating 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>.  Using our fixed line business, we are committed to
further develop, enhance and lead our fastest growing business segment &#150; data
and other network services.  Consistent with our strategy of introducing
innovative products and services using advanced technology, we have launched
various products and services that address different market needs.  </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 working to increase our cash flow available for
debt reduction and dividends by containing our operating costs, managing
capital expenditures and generating cash returns from our investments in
subsidiaries.  Since December 2002, Smart has been regularly paying dividends
to PLDT to supplement PLDT&#146;s cash flows available for debt reduction.   The
cash flows generated by our businesses have increased significantly in recent
years which has allowed us to substantially reduce our levels of indebtedness and
also restore the payment of dividends to our shareholders.  In 2005, we repaid US$714
million of debts and paid common dividends aggregating Php9,587 million.  We currently
expect that a greater proportion of our free cash flow in succeeding years may be
utilized for the payment of common dividends while continuing to service our
maturing debt obligations.</p>

<p style='line-height:8.0pt' 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='line-height:8.0pt;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='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">We
provide cellular, satellite, VSAT, wireless broadband and other services
through our wireless business segment.  </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"><i>Cellular Service</i></p>

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

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

<p style='line-height:8.0pt;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">Our
cellular business, which we provide through Smart and Piltel to over 20 million
subscribers, approximately 99% 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,
such as (a) <i>Mobile Banking</i> (banking services delivered over the cellular
network); (b) <i>Smart zedTM</i>; (c) <i>Smart Money</i>; and <br>
(d) international roaming, as well as other value-added services developed on
Smart&#146;s and Piltel&#146;s own platform.  Smart services approximately five 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 Smart&#146;s and Piltel&#146;s cellular
business as at and for the years ended December 31, 2005, 2004 and 2003:</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>2005</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>2004</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>2003</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">20,408,621</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">19,208,232</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>
 </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">15,424,196</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">14,595,782</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>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:22.5pt;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">15,144,118</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">14,321,288</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">9,831,135</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:22.5pt;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">280,078</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">274,494</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">248,977</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(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">4,984,425</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">4,612,450</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>
 </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">6%</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">51%</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">6%</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">45%</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>
 </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(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">8%</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">61%</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>
 </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">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">Php74,229</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">Php72,532</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">Php63,298</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">Service</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">71,518</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">66,421</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">52,750</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Non-service</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">&nbsp;</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">&nbsp;</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">&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">Handset sales </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">2,711</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">6,111</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">10,548</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">Percentage of cellular
 revenues to total operating revenues </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">57%</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">58%</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">56%</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-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>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Represents Talk &#145;N Text, a
prepaid service provided by Piltel using Smart&#146;s network. Piltel&#146;s revenue is
net of service fees payable to Smart for using Smart&#146;s network.  Piltel does
not offer postpaid service.</i></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 and its service brands are strong and widely
recognized brand names in the Philippines.  Smart&#146;s approach has been to
methodically segment the market and tailor services and content appropriate to
each particular niche.  An example of
Smart&#146;s successful market segmentation strategy is <i>Talk &#145;N Text</i>, the
brand carried by Smart&#146;s subsidiary, Piltel.  <i>Talk &#145;N Text</i> is aimed at
the lower-income markets with the objective of serving as a flanker brand
against competition.  Capitalizing on the Filipino&#146;s love for pop culture, <i>Talk
&#145;N Text</i> extensively uses local celebrities as its endorsers and the
vernacular in its advertising and promotional campaigns.  With almost five
million subscribers, <i>Talk &#145;N Text</i> has the third-largest GSM subscriber
base in the Philippines.</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"><i>Smart
Infinity</i> is a premium postpaid plan
targeting affluent individuals 35 years and above who are highly mobile locally
and internationally.  It offers a round-the-clock dedicated personal concierge
service, international assistance services, premium handset packages and
exclusive lifestyle content.  <i>addict mobile</i> is a postpaid plan targeting
primarily 18-35 year olds in the higher and middle-income markets.  It offers
exclusive multimedia content to subscribers and features personalized means for
Internet surfing, allowing subscribers to apply their allocated free credits
towards their choice of data and value-added services.  </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>.  The
Philippine cellular market is one of the most text messaging-intensive markets
in the world, totaling approximately a billion text messages per day.  Text
messaging 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.  Text messaging also utilizes less network
capacity than voice, thereby increasing network efficiency.</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">Text
messaging has been one of the key drivers for our cellular subscriber growth.  Strong
volume growth in text messaging contributed significantly to our cellular
revenue growth in 2005.  During 2005, our text messaging systems handled over
43,586 million standard outbound text messages with another 52,374 million
messages generated by the unlimited text offerings.  This compares to 40,953
million standard outbound text messages in 2004; unlimited text services were
not yet available in 2004.</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 currently expect that the recent awarding of a 3G
license to Smart will further enhance its current selection of voice to data
services, including text messaging.  We currently believe the success of text
messaging is a strong indicator of future data potential in this market.  </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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have been using diversified and innovative products
and services as a competitive advantage in gaining and retaining market share
as well as improving profitability.  Smart has diversified its wireless data
revenues beyond text messaging and is well ahead of other players in the market
in terms of enhanced data services.  Its catalog of innovations include the award-winning
<i>Smart Money</i> (a mobile cash card) and <i>Smart Load</i> (an over-the-air
electronic loading facility), both of which were honored by the World GSM
Congress in 2001 and 2004, respectively, as &#147;Most Innovative Service for
Consumers.&#148;  <i>Smart Load</i> has revolutionized the mobile industry in Asia with its adaptation of the &#147;sachet&#148; concept in consumer goods to air time reloads.
The concept has since been emulated by other Asian operators and is regionally
referred to as &#147;micro prepaid reloads.&#148;  Smart subsequently introduced <i>Pasa
Load</i>, a derivative service of <i>Smart Load</i>, which allows for air time
load transfers between subscribers.  Smart also offers the following
value-added cellular services:</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: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;
<i>Mobile Banking</i>, launched in collaboration with various banks, allows
subscribers to execute certain banking transactions, such as balance inquiries
and transfers, over their mobile telephones; </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:8.0pt' 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;
<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 <i>Smart Money</i> cards as well as reload their prepaid
cards electronically; and</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:8.0pt' 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;
<i>Smart Padala, </i>one of the many innovative initiatives from our <i>Smart
Money </i>platform<i>, </i>is the first cash remittance service through text
and is faster and cheaper than traditional remittance arrangements.  It was
launched initially as an international remittance service for overseas Filipino
workers but is now available for domestic remittances as well.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:8.0pt' 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">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,
Smart has a number of interactive activities, such as text games and chat
services, developed on its 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">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 serve increased demand
for bandwidth-intensive applications.  GPRS allows data transfer at an average
speed of up to 115 kilobits per second.  In addition, we have upgraded our
network to Enhanced Data for GSM Evolution, or EDGE.  EDGE is a technology that
is expected to further increase the speed and data capability of our GSM
network.  On December 29, 2005, Smart was awarded a 3G license by the NTC after
being ranked highest by the NTC in garnering a perfect score on a 30-point
grading system designed to gauge the capability of telecommunication operators
to effectively provide extensive 3G services.  As a result of the ranking,
Smart received the largest radio frequency allocation of 15 MHz as well as
first choice of frequency spectrum.  Smart chose the 1920-1935 MHz and
2110-2125 MHz spectrum, the range that would best enable it to rapidly deploy
its 3G network nationwide and at the same time offer the highest quality of 3G
service.</p>

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

<p style="margin-top:0;margin-bottom:0">On February 14, 2006, Smart rolled out its 3G network in selected key cities nationwide, making video calling,
video streaming, high speed Internet browsing and special 3G content downloads
on its 3G network available on a free trial basis, thus making Smart the first
mobile operator in the Philippines to offer 3G services to the public.  Smart
is continuing to extend the reach of its 3G network in various cities and
municipalities nationwide, further improving coverage in major urban centers
and selected provincial areas.</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"><a
name="OLE_LINK14"></a><a name="OLE_LINK13"><i>Rates
and Discounts</i></a></p>

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

<p style="margin-top:0;margin-bottom:0">Our current policy is to
recognize a prepaid subscriber as &#147;active&#148; only when the subscriber activates
and uses the SIM card and reloads at least once during the month of initial
activation or in the immediate succeeding month.  A prepaid cellular subscriber
is disconnected if the subscriber does not reload within four months after the
full usage or expiry of the last reload.</p>

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

<p style="margin-top:0;margin-bottom:0"><i>Smart Buddy</i> and <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.  The
introduction of our &#147;over-the-air&#148; electronic loading facility <i>Smart Load</i>
in 2003 made reloading of air time credits more convenient for, and accessible
to, consumers.  <i>Smart Load&#146;s</i> over-the-air reloads have evolved to
respond to market needs and are now being offered 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='margin-left:44.1pt;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=';line-height:normal' style="margin-top:0;margin-bottom:0"><b>Denomination</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid;
 border:none' style="margin-top:0;margin-bottom:0"><b>Load Expiry</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-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;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">Php10</p>
 </td>
 <td  valign=top style=' border:none;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">&#150;</p>
 </td>
 <td  valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">10 text messages</p>
 </td>
 </tr>
 <tr>
 <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">Php20</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">&#150;</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">20 text messages</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">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">3 days</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">30 text messages or 3 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;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">6 days</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">60 text messages or 6 local 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' 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' 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="margin-top:0;margin-bottom:0">115 text messages or 13
 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">30 days</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">200 text messages plus 30
 free text messages or 25 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' style="margin-top:0;margin-bottom:0">Php300</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">60 days</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">300 text messages plus 33
 free text messages or 40 local call minutes</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"><i>Smart
Load</i> was followed by <i>Pasa Load</i>,
a derivative service allowing prepaid subscribers to transfer even smaller
denominations to other prepaid subscribers.  <i>Pasa Load</i> comes in
denominations of Php2, Php5, Php10 and Php15, all carrying a one-day load
expiry.  <i>Smart Buddy</i> subscribers who reload other <i>Smart Buddy</i> or <i>Talk
&#145;N Text</i> subscribers via <i>Pasa Load</i> are charged Php1.00.</p>

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

<p style="margin-top:0;margin-bottom:0"><i>Smart Buddy </i>subscribers are charged Php6.50 per minute for calls
to <i>Smart Buddy</i> and <i>Talk &#145;N Text</i> subscribers and Php7.50 per
minute terminating to other cellular or fixed line networks.  <i>Talk &#145;N Text </i>calls
to <i>Talk &#145;N Text </i>subscribers are charged Php5.50 per minute while calls
to <i>Smart Buddy</i> and other cellular and fixed line subscribers are charged
Php6.50 per minute.</p>

<p 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"><i>Smart Gold</i> has the following flat rate and
consumable plans: </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 plans (regular 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='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;
Consumable plans are available
with monthly service fees ranging from Php800 to Php8,000 with different
amounts of free 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='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>addict
mobile</i> has the following flat rate
and consumable plans:</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;
Flat Rate plans (regular plans) are
available with monthly fees ranging from Php500 to Php3,500 with varying
amounts of free air time and free data and different rates beyond the free air
time and data, depending on the monthly service fee; 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;
Consumable plans are available
with monthly service fees ranging from Php800 to Php5,000 with different
amounts of free data and text messages.  Subscribers to these plans may apply
their monthly service fees to voice calls, text messages (both local and
international) and value-added 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"><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='text-indent:.5in' 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 or switching
to other cellular services providers by its 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">All
Smart subscribers pay an international
direct dialing rate of US$0.40 per minute.  This rate applies to 201
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' 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">Charges for point-to-point text messages beyond the
allotted free text messages are 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: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;
for <i>Smart Buddy</i> and <i>amp</i>
subscribers, Php1.00 per message; and</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: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;
for <i>Smart Gold, addict mobile</i>
and <i>Smart Infinity </i>subscribers, Php0.50 or Php1.00 per message,
depending on air time plan, as listed in the table 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='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Smart Buddy, Smart Gold</i> and <i>addict mobile</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: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;
Php15.00 per message for
international text for <i>Smart Buddy</i> and <i>amp</i> subscribers and
Php10.00 per message for international text under the <i>Smart Gold</i> plans
and for <i>addict mobile</i> and <i>Smart Infinity</i> subscribers;</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: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;
Php2.50 per message for e-text and
information-on-demand services, such as news, stock and entertainment updates;</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: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;
Php15.00 for downloading ring
tones and logos; </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: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;
Php2.50 per <i>Mobile </i><i>Banking</i>
and <i>Smart Money</i> transaction, such as balance inquiry and fund transfer;
and</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: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;
Php10.00 per subscription of
logos, ringtones:  Php5.00 per logo or ringtone for <i>addict mobile</i> and <i>Smart
Kid</i>.</p>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:
0in' 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">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;page-break-after:avoid' 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;
Php1 per MMS for MMS among all
Smart subscribers and Php2 per MMS for Smart-to-other networks;</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: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;
Php15.00 per download of pictures,
greeting cards, polyphonic ring tones;</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: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;
Php5.00 per MMS for e-text and
information-on-demand services (such as news, stock and entertainment updates);</p>

<p 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;
Php5.00/Php15.00 for downloading
via Smart WAP portal (depends on the type of service, if info-based, Php5.00
for all
brands; if personalization-based (logo or ringtones) Php15.00 per
download for all brands); and</p>

<p style='margin-left:.25in' 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;
Php10.00 per 30 minutes when
surfing outside the Smart WAP portal.</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-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">For
voice mail retrieval, all Smart subscribers are charged Php6.50 per minute.</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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Piltel&#146;s
<i>Talk &#146;N Text</i> prepaid cards are sold in the same denominations as <i>Smart
Buddy </i>prepaid cards.  <i>Talk &#145;N Text</i> offers a flat rate of Php5.50 per
minute for <i>Talk &#145;N Text</i> to
<i>Talk &#145;N Text </i>calls and
voice mail retrieval and Php6.50 for <i>Talk
&#145;N Text</i>-to-other cellular and fixed line networks, and offer US$0.40
per minute for international dialing calls to all destinations.  <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 logo and ring
tone downloads are charged within a range of Php2.50 to Php15.00 per message.  Mobile
games range from Php30.00 to Php50.00 per game download.</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">Beginning
in March 2005, Smart launched a series of promotions, under the brand <i>Smart
258 Unlimited Call and Text,</i> to test the market demand for fixed
rate or &#147;bucket&#148; plans for voice and text services.  Under these promotions,
Smart and <i>Talk &#145;N Text</i> prepaid subscribers had the option, for the
duration of the promotion, to register for unlimited on-network
(Smart-to-Smart) voice calls or unlimited on-network (Smart-to-Smart) text
messaging 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
current <i>Smart 258</i><i> </i>promotion has the following
features: </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;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;
Unlimited Text &#150; Php15, Php30 and
Php60 denominations with expiry periods of one, two and four days,
respectively, with unlimited on-network text all day service; 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;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;
Text and Call Combo &#150; Php20 load
denomination with unlimited text on-network for one day and a call with a
maximum duration of five minutes and valid within 24 hours. </p>

<p style='text-align:justify;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">On
August 23, 2005, Smart also introduced a flat rate promotion which allows Smart
and <i>Talk &#145;N Text</i> prepaid subscribers to make a call to another Smart or<i>
Talk &#145;N Text</i> subscriber of up to three minutes for Php10, or extend up to
five minutes for a flat rate of Php15.  The flat rate promotion was relaunched
on February 11, 2006 and has been extended until July 10, 2006.  </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 April 23, 2006, Smart introduced a new variety of
top-ups &#150; <i>Smart Load</i> &#147;All Text,&#148; which allows 10 and 20 messages without
expiration for a suggested retail price of Php12 and Php23, respectively.  On May 1, 2006, the number of messages allocated for the 10-message load was increased to
15.  This promotion offering the additional five messages has been extended
until June 30, 2006.</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">On April 1, 2006, Smart rolled-out <i>Smart Click</i>,
a chain of mobile Internet caf&#233;s.  <i>Smart Click</i> Internet caf&#233;s are
currently housed in air-conditioned 40-foot container vans and designed to
provide remote communities with high-speed, wireless Internet access
nationwide.  <i>Smart Click</i> has established 18 mobile Internet caf&#233;s to-date
and plans to open at least 80 branches. </p>

<p style='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 14, 2006, Smart launched its 3G service on a free-trial basis.
Subscribers using Smart&#146;s network with 3G handsets in selected key areas could
avail of services such as video calling, video streaming, high-speed Internet
browsing and special 3G content downloading under Smart&#146;s 3G 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">On May 1, 2006, Smart unveiled new and expanded 3G services and announced as well the
commercial rates of its 3G services.  Under the introductory pricing scheme
that took effect on May 1, Smart 3G rates are aligned with existing 2G rates
while some services remain free of charge.</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;
Smart-to-Smart video calls remain
free of charge while international video calls, initially available in three
countries, are priced similarly to a regular IDD call at US$0.40 per minute;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
8.0pt' 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;
all 3G video and audio streaming
are charged a Php15 access fee for every 30 minutes plus a separate fee for
content;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
8.0pt' 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;
3G Internet and WAP browsing are
priced at Php10 for every 30 minutes;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
8.0pt' 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;
downloads of 3G content such as
video clip, ringtones, visual ringers and games range from Php20 to Php50 per
download; and</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
8.0pt' 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;
Php1 per MMS for MMS among all
Smart subscribers and Php2 for Smart-to-other networks.</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">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.  We currently have 15 major dealers, ten of whom are exclusive.
These dealers include major distributors of cellular handsets and focus on telecommunications
outlets.  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> in May 2003, Smart 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 700,000 retail agents, 80%
of which are micro businesses (e.g., neighborhood stores, individuals acting as
roving agents).  These micro-retailers must be affiliated with any of Smart&#146;s ten
authorized consumer distributors.  With the prepaid reloading distribution
network now extended to corner store and individual retailer levels and minimum
reloading denominations down to Php10, Smart&#146;s prepaid service becomes even
more affordable to subscribers, thus attracting new customers in previously
underserved segments of the market.</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">For
prepaid services, we grant discounts to dealers for prepaid phone kits, air
time cards and over-the-air reloads sold.  Smart and Piltel compensate dealers with
Php800 in cash per prepaid phone kit sold.  An additional 1% discount based on
the suggested retail price is given on cash purchases.  Air time cards and
over-the-air reloads are sold to distributors at volume discounts determined by
the value of the cards purchased by the distributors.  Discounts given for air
time cards sold range from 9.5% to 10% while commissions on over-the-air
reloads range from 2.5% to 5%.  Air time cards cannot be returned or refunded
and normally expire within six to 12 months after release from the Smart
warehouse.</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, VSAT, Wireless Broadband and Other Services</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,
VSAT, wireless broadband and other services through Mabuhay Satellite and
Telesat, ACeS Philippines, our satellite phone service provider; Smart
Broadband, our wireless broadband provider; and Wolfpac, our wireless content
operator.</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>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='text-indent:.5in' style="margin-top:0;margin-bottom:0">Mabuhay Satellite, incorporated on November 10, 1994, is engaged in the control and operation of Agila II, the Philippines' first communication
satellite.  Agila II commenced commercial operations in January 1998. <a
name="_DV_C3159"> Mabuhay Satellite leases satellite space segments in both the
C and Ku bands on the Agila II satellite. </a><a name="_DV_M4790"></a> Through
Agila II satellite, Mabuhay Satellite <a name="_DV_C3160">also</a><a
name="_DV_M4791"></a> offers Internet <a name="_DV_C3162">backbone access</a><a
name="_DV_M4792"></a>, 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. </p>

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

<p style="margin-top:0;margin-bottom:0">In February 2001, Mabuhay
Satellite received a certification from the U.S. Federal Communications
Commission, or FCC, for its Agila II satellite, establishing it as the first
Asian satellite on the FCC&#146;s &#147;Permitted Space Station&#148; list.  Agila II joins
six other non-U.S. satellites on the select list.  The granting of the
certification indicates that Agila II satellite fully complies with the FCC&#146;s
technical requirements and allows U.S.-owned and operated earth stations in Hawaii to access Agila II.</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>Telesat</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-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><a
name="_DV_M4799"></a><a name="_DV_M4801"></a><a name="_DV_M4803"></a><a
name="_DV_M4806"></a>Telesat 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.  In 2005, Telesat
generated revenues of Php214 thousand and posted a net loss of Php42 million.</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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">Using VSAT technology, we also provide the following
services:</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='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;
point-to-multipoint data
transmission services, usually for intercompany communication for corporate
customers;</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: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;
private point-to-point services;
and</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: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;
connectivity for the cell sites of
our wireless network in outlying locations.</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">We
lease transponder capacity on Agila II satellite 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;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>ACeS Philippines</i></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='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">ACeS Philippines owns approximately 20.23% of AIL.
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 service 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 NSP, in Asia, including PLDT.  For further discussion regarding
the ATPA, please see <i>Note 16 &#150; Related Party Transactions</i> and <i>Note 21
&#150; </i><i>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:9.0pt;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">As
part of the consolidation process of the PLDT Group&#146;s wireless business, ACeS
Philippines&#146; operations has been integrated into Smart.  This operational
integration effectively gives Smart the widest service coverage in the
Philippines through the combination of ACeS Philippines satellite phone service
and Smart&#146;s cellular service.</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='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Smart Broadband</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:9.0pt;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">Smart
Broadband is engaged in providing wireless broadband and data services to
residential consumers as well as small and medium-scale enterprises in the Philippines.  As of December 31, 2005, Smart Broadband had 25,428 wireless broadband
subscribers, of which 21,759 residential subscribers are under the brand name <i>Smart
WiFi</i>.  <i>Smart WiFi</i> aims to strengthen Smart&#146;s position in the
wireless data segment and complements PLDT&#146;s <i>myDSL</i> service in areas
where the latter is not available.  In April 2006, this service was relaunched
as <i>Smart Bro</i>. </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='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Wolfpac</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:9.0pt;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">Wolfpac
is primarily engaged in the business of consumer mobile applications software
development and consumer mobile content development and other allied services.
Wolfpac is one of the leading content providers and the only Philippine content
provider to have been nominated twice at the annual GSM Congress for successes
in application developments.  Wolfpac generated revenues of Php197 million and
posted a net income of Php108 million in 2005.  It aims to provide Smart to
have a direct link to the content development community, a key differentiator
in wireless communication service.  The company has various agreements with
third parties for musical compositions, original sound recordings, original
movies, caller ringtunes and other services.</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='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, VSAT, wireless broadband and other
service revenues consists 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;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;
revenues generated from Telesat&#146;s
nationwide satellite network; </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:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
revenues generated from Smart
Broadband&#146;s wireless broadband and data services; 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 Wolfpac
for wireless data content.</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='text-indent:.5in;line-height:8.0pt' 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 average annual rates of approximately US$0.9
million and approximately US$0.7 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-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Smart Broadband offers its
wireless broadband and data services for residential consumers as well as small
and medium-scale enterprises.  The wireless broadband service for residential
consumers is branded as <i>Smart Bro</i> and offers a maximum speed of 384 kbps
for Php988 per month.  Monthly service fees for corporate data services range
from Php2,200 to Php48,000 depending on the connection speed requirements.</p>

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

<p style="margin-top:0;margin-bottom:0">WolfPac generates revenues from
SMS subscriptions, institutional services and downloadable contents.  The
subscription price for the SMS subscription and institutional services is
pegged at Php2.50 per SMS, while downloadable contents range from Php10.00 to
Php45.00.</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="_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='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"><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='text-indent:.5in;line-height:8.0pt;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">The following table summarizes key measures of our
local exchange service segment as at and for the years ended December 31, 2005, 2004 and 2003:</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'>
 <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>2005</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>2004</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>2003</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 fixed lines
 in service (at year-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">2,113,799</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">2,152,027</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">2,185,951</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
 (reductions)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(38,228)</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(33,924)</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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,661)</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">Growth rate </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">(2%)</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-top:0in;margin-right:6.45pt;
 margin-bottom:0in;margin-left:4.3pt;margin-bottom:.0001pt;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 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">&#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">Number of fixed line employees (at year-end)</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">9,197</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">9,692</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">10,518</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 fixed lines in
 service per employee</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">230</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">222</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">208</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
 service revenues (in millions)</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">Php20,229</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">Php20,606</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">Php20,728</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=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">(2%)</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-right:5.95pt;text-align:right' 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-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">(3%)</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 service
 revenues as a percentage of total service 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">16%</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17%</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">20%</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='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' 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 3% of our consolidated fixed lines in
service.</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">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 in the &quot;&#151;
Rates&quot; section.</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;
page-break-after:avoid' 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.</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>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">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">As
of December 31, 2005, basic monthly charges for our local exchange service in
the Metropolitan Manila area were Php645.01 for a single-party residential line
and Php1,344.14 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.  Occasionally, we launch promotions waiving or offering discounts on
installation charges to encourage subscriber take-up.  Regular installation
charges amount to Php1,999 for residential customers and Php3,500 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;
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">Pursuant
to a currency exchange rate 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 2005, we implemented three upward and six 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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">In
the first quarter of 2005, House Bill No. 926 was filed and is now pending in
the House of Representatives of the Philippines.  The proposed bill provides
for the cancellation of the currency exchange rate mechanism currently in
place.  If this bill is passed into law or if the NTC issues guidelines to
change the basis of the currency exchange rate mechanism, our ability to
generate U.S. dollar linked revenues from our local exchange business could be
adversely affected. </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;
page-break-after:avoid' 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
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&#146;s business offices,
are non-refundable.  Our prepaid fixed line customers do not pay a basic monthly
charge and are charged based on usage.  The international and national long
distance rates we charge to our prepaid fixed line customers are similar to the
rates we charge to our postpaid customers.  Prepaid fixed line customers are
charged based on usage at a rate of Php1.00 per minute for local calls.  For a
description of these rates, see &#147;&#151; International Long Distance Service &#151; Rates&#148;
and &#147;&#151; National Long Distance Service &#151; Rates.&#148;  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; asynchronous transfer mode, or ATM; and Internet protocol global backbone of PLDT
Global.</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 certain information about our international long distance
business as at and for the years ended December 31, 2005, 2004 and 2003:</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>2005</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>2004</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>2003</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 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">2,226</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">2,348</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">2,286</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">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">(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;
 page-break-after:avoid' 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-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(19%)</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">2,079</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">2,192</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">2,128</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">(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;
 page-break-after:avoid' 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-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(20%)</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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">156</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">158</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">(6%)</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">(8%)</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">14.1:1</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">14.1:1</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">13.5:1</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">Total international long distance
 service 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">Php12,245</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">Php12,804</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">Php12,767</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">(4%)</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">&#150;</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">20%</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 service
 revenues as a percentage of total service 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">10%</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">12%</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 our 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; by reducing our rates, we reduced the incentive for unauthorized traffic
termination and bypass routings by toll bypass operators, and therefore were
able to recover some lost traffic; and secondly, we intensified our efforts to
identify and contain unauthorized traffic termination and bypass through more
effective monitoring of our international trunks, leased lines and 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 local public switch telephone network in the Philippines.  This
termination of other unauthorized and international simple resale can be used
to bypass the local access charge system and is illegal in the Philippines.  In 2005, the appreciation of the peso contributed to the decline in our
international inbound revenues since settlement charges are billed in U.S.
dollars or special drawing rights.</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 are more selective in accepting incoming traffic
from new and startup 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 these strategies 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, 2005, 2004 and 2003:</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:95.92%;margin-left:9.9pt;border-collapse:collapse'>
 <tr style='height:5.75pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p style='margin-left:5.4pt;text-indent:-5.4pt;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;
 height:5.75pt'>
 <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>Net
 Settlement</b></p>
 </div>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p style='margin-left:5.4pt;text-indent:-5.4pt;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;
 height:5.75pt'>
 <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='height:5.75pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p style='margin-left:5.4pt;text-indent:-5.4pt;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;
 height:5.75pt'>
 <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">2005</p>
 </div>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <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">2004</p>
 </div>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <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">2003</p>
 </div>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 text-indent:-5.4pt;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;
 height:5.75pt'>
 <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;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 text-indent:-5.4pt;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;
 height:5.75pt'>
 <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;
 height:5.75pt'>
 <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;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:
 0in;margin-left:23.4pt;margin-bottom:.0001pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">United States</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">USS$75</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$75</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$52</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Japan</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">25</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">17</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">12</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Saudi Arabia</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">21</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">18</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">United Arab Emirates</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">17</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">13</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Italy</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">16</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">16</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Canada</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='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 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='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 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Hong Kong</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:5.4pt;text-indent:-5.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Taiwan</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='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 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='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;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Korea</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Kuwait</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='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 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='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 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT Global</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">United Kingdom</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='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 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <p align=right style='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;
 height:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 </tr>
 <tr style='height:5.75pt'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:5.75pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">20</p>
 </div>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">21</p>
 </div>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:5.75pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">28</p>
 </div>
 </td>
 </tr>
 <tr style='height:6.3pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:6.3pt'>
 <p style='margin-left:23.4pt;text-indent:-23.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:6.3pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">US$215</p>
 </div>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:6.3pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">US$228</p>
 </div>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:6.3pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in'>
 <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>
 </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"><i>Rates</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' 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">We
adopted the U.S. FCC accounting rate benchmark of US$0.38 per minute for
inbound international calls in 2000, which represented a settlement rate of
US$0.19 per minute, for international long distance traffic between the Philippines and the United States.  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.  At the end of 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 its termination rates with carriers accounting for a substantial
portion of its international inbound traffic terminating on its fixed line
network to US$0.12 per minute effective February 1, 2003 (see Item 8. &#147;&#150;&#150; Legal Proceedings &#151; Investigation by U.S. Department of Justice&#148; and <i>Note 25 &#150;
Other Matters &#150; Investigation by U.S. Department of Justice</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-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Rates
for outbound international long distance calls are based on type of service,
whether operator-assisted or direct-dialed.  Our rates are quoted in U.S.
dollars and are billed in pesos.  The peso amounts are determined at the time
of billing.  We charge a flat rate of US$0.40 per minute to retail customers for
direct-dialed calls, applicable to all call destinations at any time on any day
of the week.</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">On
September 15, 2005, we introduced <i>PLDT ID-DSL</i>, a service that allows
overseas calls for registered <i>myDSL</i> plan subscribers using a regular
PLDT fixed line or a voice pad dialer for as low as US$0.10 per minute or
US$0.08 per minute, respectively, depending on the subscribers&#146; DSL
plan/package.  </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">To
address the market&#146;s demand for low-priced international calls, PLDT modified
the <i>Budget Card</i>, a prepaid call card, offering a reduced international
direct dialing, or IDD, rate of Php5 per minute, as a promotional offer
starting September 24, 2005, for calls to 89 overseas destinations including
the United States, Canada, Japan and China<i>.</i>  <i>Budget Cards</i> are
sold in denominations of Php200 and Php100, which must be consumed within 30
days from first use.  Beginning March 4, 2006, <i>Budget Card</i> has been
further modified to Php3, Php5 and Php8 per minute calls depending on the
destination and now has 100 overseas destinations, including Saudi Arabia and other Middle East countries.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Overview</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
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='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table shows our national long distance
call volumes and revenues as at and for the years ended December 31, 2005, 2004
and 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 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;
 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 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='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>2005</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>2004</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>2003</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='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:#E0E0E0;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 call volumes (million minutes)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">1,904</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">1,853</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">2,016</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">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">3%</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">(8%)</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;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Total national long distance service
 revenues (in millions)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">Php5,254</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">Php6,736</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">Php6,561</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">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">(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">3%</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">(16%)</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;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">National long distance service revenue
 as a percentage of total service revenues</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">4%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#E0E0E0;
 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>
 </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, 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;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='margin-bottom:0in;margin-bottom:.0001pt' 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 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.  </p>

<p style='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 14, 2005, we launched a Php10 per call promotion to any PLDT fixed line
subscriber nationwide and to all Smart and <i>Talk &#145;N Text</i> subscribers.
This promotion was launched with the objective of determining a more effective
tariff structure that would stimulate fixed line usage.  Under the promotion,
NDD calls between any PLDT fixed line subscriber nationwide and to all Smart
and <i>Talk &#145;N Text</i> subscribers are charged Php10 per call instead of being
charged on a 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">On May 12, 2005, PLDT began offering the Php10 per call promotion with an additional Php5 per
call exceeding the first three minutes for the same unlimited talktime to Smart
and <i>Talk &#145;N Text</i> subscribers.  PLDT to PLDT NDD calls below the
equivalent Php10 toll usage are charged based on the regular rate per minute.
On <br>
August 12, 2005, PLDT ceased offering the Php10 per call promotion to Smart and
<i>Talk &#145;N Text</i> 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">Beginning
September 12, 2005, PLDT charges an optional Php20 add-on monthly service fee
for PLDT fixed line subscribers who may want to continue to avail of the Php10
per call promotion for calls within the PLDT network. </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
January 2006, PLDT launched the <i>10-10-10</i> promo.  This promo offers unlimited calling time terminating PLDT to PLDT for a Php50 monthly service
fee.  PLDT capped the Php10 per call service to Smart and <i>Talk &#145;N Text</i>
subscribers to those who registered on or before February 24, 2006.  </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
continue to evaluate the present rate structure of fixed line from per minute
toll charges to single rate for unlimited calls.  This is envisioned to make fixed
line rates competitive with VOIP rates and to revitalize interest in fixed line
usage.  Currently, various pricing models are being studied in respect of this
new rate plan.</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
currently has 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.  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.  For more information on these interconnection arrangements, see Item 5.
&quot;Operating and Finacial Review and Prospects &#151; Results of Operations &#151;
2005 Compared to 2004 &#151; Operating Revenues &#151; Fixed Line &#151; National Long
Distance Service.&quot;</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='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our data and other network service revenues include
charges for leased lines, IP-based, packet-based and switched-based services.
These services are used for domestic and international communications such as
private networking, broadband and narrowband internet-based data communications,
and packet-based communication.  </p>

<p style='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 data and other network service revenues for the years
ended December 31, 2005, 2004 and 2003:</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;
 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 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='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>2005</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>2004</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>2003</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='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:#E0E0E0;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 data and other network service revenues
 (in millions)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">Php10,394</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">Php7,114</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">Php5,978</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">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">46%</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>
 <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">7%</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;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Data and other network service revenue
 as a percentage of total service revenues</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">9%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#E0E0E0;
 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>
 </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
data and other network services in 2005 posted revenues of Php10,394 million,
an increase of Php3,280 million, or 46%, from Php7,114 million in 2004,
primarily due to increases in leased lines, IP-based and switched-based data
services, particularly Diginet, <i>PLDT DSL</i> and <i>PLDT Vibe</i> services,
respectively.  The revenue contribution of this service segment to our fixed
line service revenues increased to 21% in 2005 from 15% 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">Internet-based products are bannered by <i>PLDT</i> <i>DSL</i> (<i>myDSL and BizDSL</i>), <i>PLDT Vibe</i> and I-Gate.  <i>PLDT</i> <i>DSL </i>broadband Internet service is targeted for
heavy individual internet users as well as for small and medium enterprises,
while<i> PLDT Vibe,</i> or PLDT&#146;s dial-up/narrowband Internet
service, is targeted for light to medium residential or individual internet
users.  I-Gate, our dedicated leased line Internet access service, on the other
hand, is targeted to enterprises and value-added service providers.  </p>

<p style='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>PLDT
DSL</i>, which contributed revenues of
Php2,345 million during 2005 increased by Php932 million, or 66%, from Php1,413
million in 2004.  <i>PLDT DSL</i> has reached 88,811 subscribers as at December 31, 2005 compared with 48,289 subscribers in 2004.  PLDT offers a number of <i>DSL
</i>packages with speeds and monthly fees varying from 256 kbps at Php999 per
month to up to 1 Mbps at Php3,000 per month.  </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>PLDT Vibe</i>
revenues increased by Php18 million, or 7%, to Php282 million in 2005 from Php264
million in 2004.  As at December 31, 2005, the number of PLDT&#146;s fixed line subscribers for <i>PLDT Vibe </i>stood
at 382,115, of which 136,279 were exclusive postpaid users, 222,234 were
exclusive prepaid users, and 23,602 were both postpaid and prepaid users.  As
at December 31, 2004, <i>PLDT Vibe</i> subscribers totaled 305,210, of which
127,292 were exclusive postpaid users, 155,243 were exclusive prepaid users,
and 22,675 were both postpaid and prepaid users. </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 continued growth in data services revenues can be
attributed to several product offerings.  The steady demand for dedicated
connectivity or private networking from the corporate market using PLDT&#146;s
traditional bandwidth offerings &#150; Fibernet, Arcstar, Acacia, I-Gate, Diginet,
BRAINS, among others &#150; continues to provide us with a stable revenue source.
Through Diginet, we provide Smart&#146;s increasing fiber optic and leased line data
requirements, which are included under our national data services.  </p>

<p style='text-indent:40.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:40.5pt' style="margin-top:0;margin-bottom:0">We
introduced <i>PLDT WeRoam</i>, a wireless broadband service offering running on
Smart's nationwide wireless network (using GPRS, EDGE and WiFi technologies)
and PLDT's extensive IP infrastructure.&nbsp;&nbsp;<i>PLDT WeRoam</i>&nbsp;provides
workers and remote offices, of large, medium and small businesses, with
continuous wireless data connectivity, wherever the users may be, to their
corporate headquarters&#146; Intranet and/or the global Internet.  Some of the
recent enhancements to the service are the inclusion of international roaming
in key roaming countries all over the globe and national WiFi roaming access.
Principally targeted to the corporate market, the service has experienced a
take-up rate of more than 7,500 contracted customers as at March 31, 2006.  </p>

<p style='text-indent:40.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In
June 2005, the <i>PLDT Innolab</i> in Manila was further expanded in
partnership with the leading technology companies in the country.  The PLDT
Innolab is a first-of-its-kind innovation and testing center for the Philippine
telecommunications industry.  With the expanded Innovation Laboratory, more
clients as well as people from the academe and government can now be
accommodated and can experience more live industry services.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Also
in June 2005, <i>F.A.S.Track</i>, an application-based service that tracks the
whereabouts of a company&#146;s field assets through GPS and GSM technology was
introduced.  <i>F.A.S.Track</i> allows near real-time and simultaneous
monitoring of fleet vehicles and field personnel virtually connecting mobile
company assets in the field to the main office through the use of digital maps
and statistical data.</p>

<p style='text-indent:40.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:40.5pt' style="margin-top:0;margin-bottom:0">In
June 2006, we introduced <i>Shops.Work UnPlugged</i>, or SWUP, to address the
need of retailers and banks for real-time wireless data communication.  SWUP is
the first bundled service making wireless cashier point-of-sale and wireless
card terminals possible.  Retailers are now enabled to reach out to a bigger
market in areas where physical connections are unavailable and to expand the
banking system with wireless automated teller machines, or ATMs.</p>

<p style='text-indent:40.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We
conduct our information and communications technology businesses through our
wholly-owned subsidiary ePLDT.  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) call
centers through the umbrella brand name <i>ePLDT
</i><i>Ventus</i>; (b) an Internet data center under the brand name <i>Vitro</i>&#153;;
and (c) Internet and gaming through Infocom, netGames, Digital Paradise,
Digital Paradise Thailand, Ltd., or Digital Paradise Thailand, and Airborne
Access.</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>Infrastructures and Services</i></p>

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

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

<p style='page-break-after:auto !msorm;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
are focused on developing our call center business which capitalizes on the
availability of English-speaking college graduates in the Philippines with a strong customer service orientation.  ePLDT now uses one umbrella brand name, <i>ePLDT
Ventus</i>, for all of its call center businesses, including Vocativ and
Parlance.  Vocativ provides customer and technical support to its clients in
the Philippines, U.S. and U.K., while Parlance provides the exclusive customer
support and billing requirements to one of the largest direct-to-home satellite
television providers in the U.S.  In aggregate, we own and operate 3,690 seats
with 3,842 customer service representatives, or CSRs, as of March 31, 2006 compared to 2,174 seats with 2,378 CSRs as of March 31, 2005.  In 2005, ePLDT had four call centers in Metro Manila and one in Iloilo.  We currently expect
to open two additional call centers in the second half of 2006.  </p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">ePLDT sold its
entire 51% interest in Contact World, Inc. 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;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Data</i><i> Center</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">ePLDT
operates <i>Vitro&#153;</i>, one of the Philippines&#146; first internet data centers.
The Philippine Board of Investments, or BOI, granted <i>Vitro&#153;</i> pioneer
status, which entitles it to tax and other governmental incentives.  <i>Vitro&#153;</i>
is a CISCO-certified co-location service provider.  <i>Vitro&#153;</i> 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">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Internet and Gaming</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">ePLDT&#146;s internet and gaming business is conducted
through several subsidiaries.  ePLDT&#146;s equity interests in, and a brief
description of the businesses of, these subsidiaries are as follows:</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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a 99.6% interest in Infocom, one
of the country&#146;s leading Internet service providers.  Infocom offers consumer
prepaid internet access under the name of <i>WarpSpeed </i>and <i>Speed Tipid</i>,
and postpaid internet access, dedicated dial-up and multi-user dial-up,
corporate leased lines and broadband internet access through <i>DSL</i> or <i>NOW</i>
cable internet, as well as web consulting, development and hosting.  The <i>NOW</i>
cable internet brand was sold on February 1, 2005;</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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a 69.15% interest in Digital Paradise,
an Internet caf&#233; business, which assumed the assets and brand of Netopia
Computer Technologies, Inc., under the brand <i>Netopia</i>.  <i>Netopia</i> is
now one of the largest and fastest growing Internet caf&#233; chains in the country
with over 180 branches and over 8,200 work stations.  Digital Paradise offers
high-speed internet services, including internet advertising, gaming and printing;</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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a 60% interest in Level Up!, a
leading publisher of online games in the Philippines with about 80% of the
online gaming market;</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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a 60% interest in netGames, Inc.,
or netGames, a publisher for Massively Multiplayer Online Game, or MMOG, in the
 Philippines.  netGames, which was incorporated on June 21, 2004, is the Philippine licensee of Khan Online, the country&#146;s first full 3D online game.
netGames commenced full commercial operations in February 2005;</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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a 51% interest in Digital Paradise
 Thailand, an affiliate of Digital Paradise offering similar services in Thailand; </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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a 51% interest in Airborne Access,
the country&#146;s leading operator of WiFi hotspots, which provides wireless
internet access in hotspots equipped with Airborne Access WiFi access points;
and</p>

<p style='text-indent:0in !msorm;line-height:normal !msorm;
page-break-after:auto !msorm;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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a 20% interest in Philweb, a
company primarily engaged in Internet-based gaming, which offers Internet
sports betting and Internet casino in partnership with the Philippine Amusement
and Gaming Corporation.</p>

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

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Other
Investments</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">ePLDT
also currently holds equity interests in the following entities:</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;
mySecureSign, Inc., a wholly-owned
subsidiary of ePLDT and an affiliate of VeriSign, Inc., which issues VeriSign
digital certificates in the Philippines for e-commerce transactions;</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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
iPlus Intelligent Network, Inc.,
or iPlus, a wholly-owned subsidiary of ePLDT, which provides IT helpdesk/contact center services and terminals for
credit, debit and cash card transactions;</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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
22.5% interest in 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; 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;
19.17% interest in BayanTrade
Dotcom, Inc., or BayanTrade, an
e-procurement joint venture established together with six of the Philippines&#146; leading conglomerates.  Initial shareholding in BayanTrade was originally
20.5%, which was subsequently diluted to 19.17% in August 2004 due to an equity
call to which ePLDT did not subscribe.</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 growth strategy, we may from time to
time make acquisitions and investments in companies or businesses, which may or
may not be significant.  For example, on May 25, 2006, we announced that
ePLDT and SPI Tech, L.P. entered into a non-binding letter of interest in
respect of a potential acquisition by ePLDT of 100% of SPI, one of the leading
pure-play BPO companies and independent BPO service providers in the world.  We believe that
the possible acquisition of SPI would solidify ePLDT&#146;s position as one of the
largest full service BPO companies.  For more information about the possible
acquisition, see &#147;Item&nbsp;4. Information on the
Company&#151;Organization.&#148;<b>  </b></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="_Toc75779205"></a><a
name="_Toc46082265">Wireless 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>Cellular</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">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 2005, Smart has 37 mobile
switching centers, 47 text messaging service centers and 5,982 base stations in
operation after having added 679 base stations to its nationwide cellular network
in 2005.  As of December 31, 2005, Piltel have 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 band
supporting both its GSM and previously its ETACS network and 20 MHz in the 1800
band for GSM and 15 MHz in the 3G band for W-CDMA.  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.  The 3G network revolutionizes mobile technology by providing
more capacity, faster data rates and richer data and video applications.  Its
initial deployment is seen as feasible in urban areas where there is a demand
for mobile broadband applications and where 3G mobile units are more likely to
be available.  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 11.5 MHz out of the
12.5 MHz 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;
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">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 introduced 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 solution.</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
was awarded a 3G license by the NTC on December 29, 2005.  Smart received the largest radio frequency allocation of 15 MHz as well as first choice of frequency
spectrum.  Smart chose the 1920-1935 MHz and 2110-2125 MHz spectrum, the range
that would best enable it to rapidly deploy its 3G network nationwide and at
the same time offer the highest quality of 3G service.  Smart has commenced its
3G network roll-out and continues to extend the reach of its 3G network in
various cities and municipalities nationwide, further improving coverage in
major urban centers and selected provincial areas. </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
and Piltel have been co-locating their cell sites where their base stations are
installed.  As of December 31, 2005, 23 of Smart's mobile switching centers and
183 of Smart's cell sites are housed in PLDT&#146;s fixed line complexes while 243
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, VSAT, Wireless Broadband and Other 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">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">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='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">Smart
Broadband operates a nationwide broadband wireless Internet data services.  It
is operating in the 2.4, 3.5 and 5.7 Ghz spectrum, supporting its WiFi, Canopy
and eventually WiMax services, respectively.  It offers fixed wireless
broadband Internet connectivity to both residential and corporate clients.  It
also maintains and operates WiFi hotspots installations that serve mobile
Internet users.  More than 1,700 of Smart&#146;s base stations are now wireless
broadband-capable, covering most of the key cities and the other populated
centers in the country.  These are strategically co-located in Smart&#146;s cellular
base stations that allow it to reach as many subscribers as possible, in the
fastest possible way.  For its backbone, it uses the nationwide PLDT and Smart
fiber optic and IP backbone that provide substantial bandwidth capacity to
utilize and to grow on demand.</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 at December 31, 2005, 2004 and 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=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 at
 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>2005</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>2004</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>2003</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">183</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">Number of 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">2,113,799</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">2,152,027</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">2,185,951</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">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">44</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">45</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>
 </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">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.  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.
Upon completion of an additional 1,000-kilometer optic link, which is expected
to occur by the end of July 2006, we will have seven self-healing rings to
accommodate the increasing demand for higher-capacity data, voice and video
service.  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-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We
are currently upgrading our fixed line facilities to NGN, a broad term for
certain emerging computer network technology that can encompass voice, data and
video where all information is efficiently transmitted via digital packets of
data.  It is a platform for more services made available to our fixed line
subscribers.</p>

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

<p style="margin-top:0;margin-bottom:0"><i>International</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
provide international network services using our three international gateway
switching exchanges.  As at December 31, 2005, our international long distance
facilities allow direct correspondence with 50 countries/ territories
(representing 95 correspondents) and can reach 360 foreign destinations (via
direct and transited routes including breakouts) 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'>
 <tr>
 <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;
 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'>
 <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'>
 <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=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <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'>
 <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'>
 <p 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'>
 <p 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'>
 <p 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'>
 <p style="margin-top:0;margin-bottom:0">Philippines, Hong Kong, Japan, Korea, Malaysia, Singapore, China and Taiwan</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">Transpacific Cable No. 5</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Guam, Japan, Hawaii and the U.S. Mainland</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">SEA-ME-WE-3</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p 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'>
 <p 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'>
 <p 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'>
 <p style="margin-top:0;margin-bottom:0">Asia Pacific</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p 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'>
 <p style="margin-top:0;margin-bottom:0">PacRim East </p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Hawaii and New Zealand</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">M-T </p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Malaysia and Thailand </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">C-J </p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">China and Japan </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">North Pacific</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Japan, Alaska and the U.S. Mainland</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">Americas Cable 1</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p 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'>
 <p 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'>
 <p 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'>
 <p 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'>
 <p 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'>
 <p style="margin-top:0;margin-bottom:0">FLAG Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Japan, Korea, 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'>
 <p 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'>
 <p 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'>
 <p style="margin-top:0;margin-bottom:0">RIOJA Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Spain, UK, Belgium and the Netherlands</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">RJK Cable</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p 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'>
 <p 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'>
 <p 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:#D9D9D9;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">TAT 10 Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p 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'>
 <p 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'>
 <p 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'>
 <p style="margin-top:0;margin-bottom:0">TVH Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p 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'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">PC-1 and Japan-U.S. Cable
 and TGN</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Japan and the U.S.</p>
 </td>
 </tr>
</table></center></div>

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

<p style='text-indent:0in !msorm;page-break-after:
auto !msorm;punctuation-wrap:hanging !msorm;text-autospace:ideograph-numeric ideograph-other !msorm;
margin-bottom:0in;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On June 1, 2006, a consortium of major international telecommunication operators
- - AiTi of Brunei Darrusalam, CAT
Telecom (Thailand), PLDT (Philippines), REACH (Hong Kong), StarHub (Singapore),&nbsp;Telekom Malaysia (Malaysia) and VNPT (Vietnam) -&nbsp;signed a memorandum of agreement to build an undersea
cable linking Southeast Asia and
the U.S.&nbsp; The proposed <i>Asia-America
Gateway</i> will
span 20,000 kilometers and will use the latest dense wavelength
division multiplexing, or DSDM, technologies.&nbsp; It is currently expected that the Asia-America
Gateway will be ready for service
in 2008.</p>

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

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779207"></a><a
name="_Toc46082266">Interconnection
Agreements</a></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">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-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">Under
an interconnection agreement among Smart, PLDT and Globe 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 have been 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, which
terminate calls to 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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Under
a separate agreement between PLDT and PAPTELCO, PLDT is the transit facility provider
between Smart, Globe, other local exchange carriers, or LEC, operators and
PAPTELCO.  PAPTELCO is comprised of 49 LEC, and operating in 150 major
telephone exchanges nationwide.  Transit traffic is a service by PLDT to Smart,
Globe, other LEC operators and PAPTELCO members where PAPTELCO members have no
direct interconnection with either Smart, Globe and other LEC operators.</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
 February 1, 2003, international calls terminating to PLDT&#146;s fixed line network
were charged a termination rate of an average of approximately US$0.12 per
minute compared to the previous rate of US$0.08 per minute.  Also,
international calls terminating to Smart&#146;s cellular network were charged a
termination rate of US$0.16 per minute, an increase from the previous termination
rate of 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 to another cellular operator&#146;s network.  For
SMS originating from Smart and terminating on other operators&#146; cellular network
and for SMS originating from other operators and terminating on Smart&#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='page-break-after:auto' 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' style="margin-top:0;margin-bottom:0">PLDT
and Smart provide telecommunications services pursuant to legislative franchises,
which will expire, in the case of PLDT, on November 28, 2028, in the case of Smart, on March 27, 2017 and, in the case of Piltel, on 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.  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.</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 will 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.  We currently expect that the NTC will
grant these extensions; however, we cannot assure you that this will occur.
The period of validity of some of PLDT&#146;s CPCNs which expired on November 28,
2003, coterminous with the term of its previous franchise under Republic Act
No. 6146, has been extended further by the NTC to November 28, 2028,
coterminous with PLDT&#146;s current franchise under Republic Act No. 7082. Motions
to extend the period of validity of the other CPCNs to November 28, 2028 are now pending with the NTC.  See Item 3. &quot;Key Information &#150;&#150; 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, rates
and taxes.&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">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 will 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-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">On
 December 29, 2005, Smart was awarded a 3G license by the NTC after being ranked
highest by the NTC in garnering a perfect score on a 30-point grading system
designed to gauge the capability of telecommunication operators to effectively
provide extensive 3G services.  As a result, Smart received the largest radio
frequency allocation of 15 MHz as well as first choice of frequency spectrum.
Smart chose the 1920-1935 MHz and 2110-2125 MHz spectrum. </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;punctuation-wrap:hanging;text-autospace:
ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">Under the
terms of the 3G license, Smart is required to:</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-top:0in;margin-right:0in;margin-bottom:3.0pt;
margin-left:.5in;text-indent:0in;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;
begin installation and rollout of a
3G network no later than 18 months from date of award;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
margin-left:.5in;text-indent:0in;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;
start commercial operations no
later than 30 months from date of award; and</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
margin-left:.5in;text-indent:0in;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;
cover at least 80% of provincial
capitals and 80% of chartered cities within five years.</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;punctuation-wrap:hanging;text-autospace:
ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">Smart is also
required to pay annual license fees of Php115 million based on the 15 MHz
awarded to the Company.</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;
page-break-after:avoid' 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, will expire on May 14, 2019 and may be extended by a legislative act of the Philippine Congress.</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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table sets forth the spectrum system,
licensed frequency and bandwidth used by Smart, Piltel and Smart Broadband:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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='margin-left:5.4pt;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:8.65pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;height:8.65pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.65pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;height:8.65pt'>
 <td  valign=top style=' background:#CCCCCC;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#CCCCCC;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">GSM 1800</p>
 </td>
 <td  valign=top style=' background:#CCCCCC;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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:#CCCCCC;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;height:8.65pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;height:8.65pt'>
 <td  valign=top style=' background:#CCCCCC;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#CCCCCC;padding:0in 5.4pt 0in 5.4pt;
 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=' background:#CCCCCC;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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:#CCCCCC;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;height:8.65pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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;
 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=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <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;
 height:8.65pt'>
 <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;height:8.65pt'>
 <td  valign=top style=' background:#CCCCCC;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#CCCCCC;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#CCCCCC;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1780-1782.5/1875-1877.5 MHz</p>
 </td>
 <td  valign=top style=' background:#CCCCCC;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;height:8.65pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">3G (W-CDMA)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">1920-1935/2110-2125
 MHz</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">15.0 MHz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.65pt'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.65pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">Piltel</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">AMPS/CDMA</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">824-835/869-880 MHz</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">11.0 MHz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.65pt'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">845-846.5/890-891.5
 MHz</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">1.5 MHz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.65pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <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;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.65pt'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">Smart Broadband</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">Wireless broadband</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">2400-2483.5 MHz</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">72 MHz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.65pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">3400-3590 MHz</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">45 MHz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.65pt'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">5470-5850 MHz</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0">44 MHz</p>
 </td>
 </tr>
</table></center></div>

<p 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">Operators of international gateway facilities and
cellular telephone operators, pursuant to Executive Order No. 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' 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 required to pay various permits, regulation and
supervision fees to the NTC.  PLDT and Smart are currently engaged in disputes
with the NTC over some of the assessed fees.  For more information on the
disputes involving PLDT and Smart, see &#147;Item 8. Financial Information &#150; Legal
Proceedings &#150; Taxation &#150; NTC Fees.&#148;</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">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 this annual
report.</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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">In a letter dated April 12, 2005, the NTC requested that Smart pay the following fees in respect of its CPCNs and provisional
authorities:</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:83.78%;margin-left:23.4pt;border-collapse:collapse'>
 <tr style='height:7.9pt'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:7.9pt'>
 <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>Case No.</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:7.9pt'>
 <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>Fee</b></p>
 </div>
 </td>
 </tr>
 <tr style='height:7.9pt'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:7.9pt'>
 <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;
 height:7.9pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:7.9pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:7.9pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">93-482</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:7.9pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php62,510,950</p>
 </td>
 </tr>
 <tr style='height:7.9pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:7.9pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">94-220</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:7.9pt'>
 <p align=center style='margin-right:15.85pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">878,830</p>
 </td>
 </tr>
 <tr style='height:7.9pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:7.9pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">96-248</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:7.9pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">6,815,500</p>
 </div>
 </td>
 </tr>
 <tr style='height:7.9pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:7.9pt'>
 <p style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:7.9pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;'>
 <p align=center style='text-align:center;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Php70,205,280</p>
 </div>
 </td>
 </tr>
</table></center></div>

<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">Piltel
has been assessed by the NTC for deficiency supervision and regulation fees.
The total amount assessed was Php1,306 million, including penalties amounting
to Php501 million, as of December 31, 2003.  Piltel protested the assessments
in good faith.  On December 8, 2004, the Department of Justice, or DOJ, issued
an opinion in response to the query of the NTC on whether the latter can
recompute the supervision and regulation fees due from Piltel and whether it
can validly impose penalties and surcharges in view of the pending protest of
Piltel over the NTC&#146;s computation of the supervision and regulation fees.  The
DOJ ruled that the NTC could recompute Piltel&#146;s supervision and regulation fees
to exclude subscriptions issued by virtue of a debt rehabilitation scheme.
Likewise, the DOJ ruled that the imposition of surcharges and penalties
constitutes deprivation of property without due process of law because the NTC
must first pass upon the protests of Piltel before it can impose such penalties
and surcharges.</p>

<p style='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 a
decision received by Piltel on February 8, 2005, the NTC recomputed the
supervision and regulation fees due from Piltel.  Pursuant to the said
decision, Piltel was required to pay supervision and regulation fees in the
amount of approximately Php550 million and Php9 million, respectively.  The
foregoing amounts were tendered by Piltel to the NTC, and received by the NTC,
on February 11, 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">In
an assessment dated August 4, 2005, the NTC required Piltel to pay supervision
and regulation fees of Php81 million for the year 2005.  The assessment, which
was paid on September 30, 2005 already reflects the new computation based on
the above DOJ ruling.  Consequently, Piltel adjusted its accrual for NTC
supervision and regulation fees to reflect the latest assessment.</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">In order to diversify the ownership base of public
utilities, the Public Telecommunications Policy Act <br>
(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='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;
the fifth anniversary of the date
the law became effective; and</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;
the fifth anniversary of the date
of the entity&#146;s commencement of commercial operations.</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">PLDT
and Piltel have complied with this requirement.  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 this
ten-year period is generally also applicable to Smart.  As Smart has not
conducted a public offering of its shares by August 2004, the Philippine
Congress may revoke the franchise of Smart for failure to comply with the
requirement under R.A. 7925 to conduct a 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 for the failure of Smart to conduct a public offering of its
shares by August 2004.  However, Smart believes that it did not violate the
terms of its franchise by not conducting an initial public offering by August
2004.  Smart believes that it should be deemed to have complied with the
requirement of making a public offering of its shares since PLDT owns 100% of the
outstanding shares of Smart.  The purpose of R.A. 7925 in requiring
telecommunications companies to make a public offering of their shares, which
is to broaden public ownership in telecommunications entities, is already
realized in PLDT, being a publicly listed company, owning 100% of Smart.
Moreover, Smart believes that the period stated in R.A. 7925 and in the other
legislative franchises within which to conduct a public offering and listing of
shares of stock of telecommunications companies should be deemed as merely
directory and not mandatory.  The DOJ has rendered an opinion that the
three-year period fixed under the  Downstream Oil Industry Deregulation Act of
1998 (R.A. 8479) for the conduct of the initial public offering of shares in
entities engaged in the oil refinery business should be regarded as merely
directory.  Smart believes that this DOJ opinion should also apply to the
period for the conduct of initial public offering of telecommunications
companies.  In September 2004,
Senate Bill No. 1675 was filed seeking to amend Section 21 of R.A. 7925.  The
bill seeks to declare that a telecommunications entity shall be deemed to have
complied with the requirement of making a public offering of its shares if
two-third of its outstanding voting stock are owned and controlled directly or
indirectly, by a listed company.  The bill is currently pending in the
Philippine Senate.  PLDT regularly
evaluates various strategic options with respect to its capital structure.</p>

<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">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.  In addition, several bills have also been submitted, for
consideration by Congress, to impose a franchise tax at a rate of 7% or 5% tax
on gross receipts of all telecommunications companies in lieu of the 10% value
added tax.  </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="_Toc75779209"></a><a name="_Toc46082268">Competition</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
enactment of the 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='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:auto' style="margin-top:0;margin-bottom:0">Cellular 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">There
are presently six operating 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, formed another operating group.  These two operating groups share approximately
95% of the Philippine cellular market.  The third active operator, Digitel,
commenced its cellular service, <i>Sun Cellular</i>, on March 29, 2003 and is estimated to have approximately 5% of the cellular market as of December 31, 2005.  In December 2005, the
NTC awarded 3G licenses to existing cellular operators Smart, Globe, Digitel
and to a new entrant CURE.  The NTC has yet to award a fifth license to another
operator.</p>

<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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">Competition in the cellular industry has intensified
with the availability of affordably priced handsets offering a range of new
functions and the introduction by competitors of new and improved plans for
postpaid subscribers, reduced rates per minute and aggressive marketing and
promotional strategies.  The principal bases of competition are price,
including handset cost, quality of service, geographic coverage and
attractiveness of packaged services.  Smart's network leads the industry in
terms of coverage with 5,982 base stations as of December 31, 2005.&nbsp;</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">In
October 2004, <i>Sun Cellular</i> launched its &#147;24/7&#148; service whereby its
prepaid subscribers were offered unlimited calls and text messaging within the <i>Sun
Cellular</i> network over a certain period for a fixed fee (e.g. Php100 for 10
days and Php250 for 30 days of unlimited calls and text messaging).
On&nbsp;March 15, 2005, the Php250 monthly&nbsp;fee was increased to Php350
while the duration of Php100 service was shortened to seven days.  <i>Sun
Cellular</i> postpaid subscribers can utilize a similar feature by adding
Php350 per month to their monthly service fee.  The launch of <i>Sun Cellular&#146;s
&#147;24/7&#148;</i> promotion brought out a market segment that is attracted to &#147;bucket&#148;
plans for voice and text services.  On March 8, 2005, Touch Mobile, a prepaid
GSM service offering of <i>Innove</i>, launched its &#147;Todo Tawag, Todo Text&#148;
promo wherein Touch Mobile subscribers have the option to avail of unlimited
local calls and text messaging among Touch Mobile subscribers.  The promotion
covers local voice calls and text messaging only between Touch Mobile
subscribers for Php150 with a validity of 15 days.  On March 11, 2005, Smart launched &#147;<i>Smart 258</i>&#148;, a promotion open to all Smart and <i>Talk
&#145;N Text</i> prepaid subscribers who wish to avail of unlimited on-network voice
calls and unlimited on-network text messaging.  On March 22, 2005, Globe launched its own unlimited call and text promotion wherein Globe subscribers
could call and text other Globe subscribers for a fee of Php300. While most of
the &#147;bucket&#148; priced plans currently available in the market are being offered
on promotional bases, Smart, Globe and Sun Cellular continue to launch other
services which are designed to encourage incremental usage from existing
subscribers and also to attract new subscribers.  On December 18, 2005, Touch Mobile unveiled a new promotional rate of Php0.75 per message sent
exclusively for Touch Mobile subscribers only.  On December 17, 2005, Globe introduced its Php0.10 per second call rate exclusively for its prepaid and
postpaid subscribers.</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">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, multi-media
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;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 February 14, 2006, Smart opened its 3G network in selected key
cities nationwide, making video calling, video streaming, high speed Internet
browsing and special 3G content downloads on its 3G network available on a free
trial basis to subscribers with 3G handsets.  Globe launched its 3G service on April 30, 2006.</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">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 and preventing
subscribers from swapping the existing SIM for a SIM of a competing operator.
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.  Switching to
another cellular operator would, however, result in a change of the
subscriber&#146;s cellular telephone number.</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">From
October 2003 to May 2005, &#147;SIM-swapping&#148; became a prevalent promotional
activity in the Philippine cellular industry.  In &#147;SIM-swapping&#148; promotions,
prepaid cellular subscribers had the ability to switch from one cellular
operator to another by simply exchanging their current prepaid SIM card for
another operator&#146;s SIM card with a certain amount of preloaded air time credits
at no cost.  These &#147;SIM-swapping&#148; activities gave rise to a situation where
certain subscribers regularly swapped their SIM card between cellular operators
upon full use of the pre-stored air time. As a result, our cellular subscriber
base contained a certain number of transient subscribers at any one point in
time.  In May 2005, we terminated our &#147;SIM-swapping&#148; promotions which led to an
increase in our churn rates beginning in the third quarter of 2005 and
continuing on to the first half of 2006.  </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' 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, however, remained weak
due to the surge in demand for cellular services and in the past, 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.  In June 2005, Innove Communication, a
wholly-owned subsidiary of Globe, was granted a national franchise by the NTC
to provide fixed line service nationwide.</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">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="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, through our
wholly-owned subsidiary PLDT Global, presence in key cities overseas to
identify and capture Philippine terminating 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 its 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 Item 5. &#147;Operating and Financial
Review and Prospects &#150;&#150; Results of Operations &#150;&#150; 2005 Compared to 2004 &#150;&#150;
Consolidated Operating Revenues &#150;&#150; Fixed Line &#150;&#150; International Long Distance,&#148; and
Item 3.  &#147;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 25 &#150;&#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.  <i>Sun Cellular</i> and
Globe have also launched new pricing schemes to grow their outbound call
volumes.</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"><i>National Long Distance
Service</i></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">Our national long
distance service business has been negatively affected 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-mail.  In addition, various Internet service
providers have launched voice services via the net to their subscribers
nationwide.</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">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='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 January 5, 2005, <i>Globelines</i> launched a plan that offered all its subscribers free
NDD calls nationwide.  Digitel's flat rate for Sun-to-Sun calls was positioned
not only as a strong alternative to other cellular services, but also as a
replacement to the fixed line.  On February 14, 2005, PLDT launched its Php10
per call promotion to any PLDT fixed line subscriber nationwide and to all
Smart and <i>Talk &#145;N Text</i> subscribers.  On May 12, 2005, PLDT began offering the Php10 per call promotion with an additional Php5 per call for the same
unlimited talktime to Smart and <i>Talk &#145;N Text</i> subscribers.  On August 12, 2005, PLDT ceased offering the Php10 per call promotion to Smart and <i>Talk &#145;N
Text</i> subscribers.  Beginning September 12, 2005, PLDT charged an optional
Php20 add-on monthly service fee for PLDT fixed line subscribers who may want
to continue to avail of the Php10 per call promotion for calls within the PLDT
network.  Beginning January 2006, the Php10 per call has been made permanent
with a Php50 optional monthly service fee for those who may want to avail of
the service.  The promotion introduces a shift from the &#147;per minute charging.&#148;
The promotion allows PLDT fixed line subscriber access to over 22 million PLDT,
Smart and <i>Talk &#145;N Text</i> subscribers at a lower rate.  PLDT capped the
Php10 per call service to Smart and <i>Talk &#145;N Text</i> subscribers to those
who registered on or before February 24, 2006.  PLDT fixed line subscribers,
however, can still register and avail of the unlimited Php10 per call service
for national long distance calls within the PLDT network.</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">Data
and Other Network Services</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 major competitors in this area are
Globe/Innove, BayanTel, Eastern Telecoms and Digitel.  The principal bases of
competition in data services market are coverage, price, customer service and
quality of service.</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="_Toc75779210"></a><a
name="_Toc46082269"></a><a name="_DV_M5729"></a><a name="_DV_M5730"></a><a
name="_DV_M5731"></a><a name="_DV_M5732"></a><a name="_DV_M5733"></a><a
name="_DV_M5742"></a><a name="_DV_M5743"></a><a name="_DV_M5814"></a><a
name="_DV_M5815"></a><a name="_DV_M4751"></a><a name="_DV_M4753"></a><a
name="_DV_M5824"></a><a name="_DV_M5826"></a><a name="_DV_M5828"></a><a
name="_DV_M5829"></a><a name="_DV_M5830"></a><a name="_DV_M5832"></a><a
name="_DV_M5833"></a><a name="_DV_M4768"></a><a name="_DV_M4769"></a><a
name="_DV_M4770"></a><a name="_DV_M4771"></a><a name="_DV_M4773"></a><a
name="_DV_M4774"></a><a name="_DV_M4775"></a><a name="_DV_M4776"></a><a
name="_DV_M5877"></a><a name="_DV_M4837"></a><a name="_DV_M4840"></a><a
name="_DV_M4841"></a><a name="_DV_M4922"></a><a name="_DV_M4923"></a><a
name="_DV_M4924"></a><a name="_DV_M4949"></a><a name="_DV_M4953"></a><a
name="_DV_M4954"></a><a name="_DV_M4955"></a><a name="_DV_M5991"></a><a
name="_DV_M5993"></a><a name="_DV_M5996"></a><a name="_DV_M5997"></a><a
name="_DV_M5998"></a><a name="_DV_M5999"></a><a name="_DV_M5027"></a><a
name="_DV_M5028"></a><a name="_DV_M5029"></a><a name="_DV_M5030"></a><a
name="_DV_M5066"></a><a name="_DV_M5068"></a><a name="_DV_IPM159"></a><a
name="_DV_IPM160"></a><a name="_DV_IPM161"></a><a name="_DV_IPM162"></a><a
name="_DV_ZIII2255"></a><a name="_DV_IPM163"></a><a name="_DV_M5085"></a><a
name="_DV_M6081"></a><a name="_DV_M6082"></a><a name="_DV_M5101"></a>Environmental Matters</p>

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

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="OLE_LINK12"></a><a
name="OLE_LINK1"></a><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">We own four office buildings
located in Makati City and own and operate 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.  As at December 31, 2005, we had 4,305 cellular cell sites and 5,982 base stations.</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">As
of December 31, 2005, our principal properties, excluding property under
construction, consisted of the following, based on book values:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
39% consisted of cable and wire facilities,
including our DFON, subscriber cable facilities, inter-office trunking and toll
cable facilities;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
23% consisted of central office
equipment, including three international gateway facilities, six pure national
toll exchanges and 15 combined local and toll exchanges;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
19% consisted of cellular
facilities;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
11% consisted of land and improvements
and buildings, which we acquired to house our telecommunications equipment,
personnel, inventory and/or fleet;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
5% consisted of vehicles,
furniture and other work equipment; and</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
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;
3% consisted of communications
satellite. </p>

<p style='margin-left:.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 and a portion of ePLDT&#146;s property 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, the bulk of which have lease terms
ranging from two to ten years covering certain offices, warehouses,
telecommunications equipment locations and various office equipment.</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">Item
4A.     Unresolved Staff Comments</p>

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

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">None.</p>

<p style='text-indent:.5in;line-height:8.0pt' 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;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"><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 at December 31, 2005 and 2004
and for the years ended December 31, 2005, 2004 and 2003 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 U.S. GAAP.  For convenience, certain peso financial
information in the following discussions has been translated to U.S. dollars at
the exchange rate at December 31, 2005 of Php53.062 to US$1.00, as quoted
through the Philippine Dealing System.</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="margin-top:0;margin-bottom:0"><a name="_Toc75779214"></a><a name="_Toc46082273">Overview</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='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 which serve as the basis for management&#146;s decision to
allocate resources and evaluate operating performance:</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;
<i>Wireless</i> &#151; wireless
telecommunications services provided by Smart and Piltel, our cellular service
providers; Smart Broadband, our wireless broadband provider; Wolfpac, our
wireless content operator; and Mabuhay Satellite, ACeS Philippines and Telesat,
our satellite, VSAT, wireless broadband and other services operators;</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>Fixed Line</i> &#151; fixed line
telecommunications services are primarily provided through PLDT.  We also
provide fixed line services through PLDT&#146;s subsidiaries PLDT Clark Telecom,
Subic Telecom, Maratel, Piltel and BCC, which together account for
approximately 3% of our consolidated fixed lines in service, 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; call center
services provided under one umbrella brand name <i>ePLDT Ventus</i>, including
Parlance and Vocativ; Internet access and gaming services provided by ePLDT&#146;s
subsidiaries, Infocom, Digital Paradise, Digital Paradise Thailand, netGames,
Airborne Access and Level Up!; and e-commerce and IT-related services provided
by other investees of ePLDT, as discussed in <i>Note 8 &#150; Investments </i>to the
accompanying consolidated financial statements in Item 18.</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:0in;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="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our wireless business provides
cellular, satellite, VSAT, wireless broadband and other services, with cellular
services contributing about 96% and satellite, VSAT, wireless broadband and
other services contributing 4% of our wireless service revenues as at December 31, 2005.  Rapid growth in the cellular market has resulted in a change in our
revenue composition and sources of our revenue growth.  Starting 2003, cellular
service has been our major revenue source surpassing fixed line revenues by
five percentage points.  As at December 31, 2005, Smart and Piltel, which
offers service using Smart&#146;s 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 6% in 2005, which was
lower than the increases in Smart&#146;s and Piltel&#146;s subscriber base of 48% and 51%
in 2004 and 2003, respectively.  As of December 31, 2005, our aggregate systemwide cellular subscribers outnumbered our fixed line
in service by more than 9 to 1.  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.  Cellular service revenues accounted for 57%, 56% and 51%
of our total service revenues for 2005, 2004 and 2003, respectively.</p>

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

<p style='margin:0in;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>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 service has been our major revenue source
contributing 56% and 69% of our consolidated service revenues in 2002 and 2001,
respectively.  Although relatively stable in absolute terms, our fixed line
revenues&#146; contribution to total operating revenues have declined to 42% in
2003, 39% in 2004 and 38% in 2005, 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 to 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
increased its contribution to the overall fixed line revenues in 2003, 2004 and
2005 on account of an increase in our average termination rates implemented in
2003.</p>

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

<p style='margin:0in;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>Information and Communications
Technology</b></h4>

<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
information and communications technology business is conducted through our
wholly-owned subsidiary, ePLDT.  ePLDT&#146;s principal businesses are the operation
of an Internet data center under the brand name <i>Vitro&#153;</i>; three
wholly-owned call centers under an umbrella brand <i>ePLDT Ventus</i>, and
Infocom, an ISP.  As a percentage of our total service revenues, our
information and communications technology service revenues increased to 3% in
2005 from 2% in 2004 and 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">On May 25, 2006, we announced that ePLDT and SPI Tech,
L.P. entered into a non-binding letter of interest in respect of a potential
acquisition by ePLDT of 100% of SPI, one of the leading pure-play BPO companies
and independent BPO service providers in the world. For more information about
the possible acquisition, see &#147;Item&nbsp;4. Information on the
Company&#151;Organization.&#148;</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' style="margin-top:0;margin-bottom:0">Our
revenue recognition policies require us to make use of estimates and
assumptions that may affect the reported amounts of our revenues and
receivables.  While we believe that our judgments and assumptions are
appropriate and reasonable, significant changes in our judgments and
assumptions may materially affect our reported amounts of our revenues and
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">Our
agreements with domestic and foreign carriers for inbound and outbound traffic
subject to settlements require traffic reconciliations before actual settlement
is done, which may not be the actual volume of traffic as measured by us.
Initial recognition of revenues is based on our observed traffic adjusted by
our normal experience adjustments, which historically have not been material in
our consolidated financial statements.  Differences between the amounts
initially recognized and actual settlements are taken up in the accounts upon
reconciliation.  However, there is no assurance that such use of estimates may
not result to material adjustments in future periods.</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">Revenues
under a multiple element arrangement specifically applicable to our wireless
business are split into separately identifiable components and recognized when
the related components are delivered in order to reflect the substance of the
transaction.  The fair value of components is determined using verifiable
objective evidence.  Revenue for handset sales is quantified and identified
separately using the residual value method from our cellular service revenue.
 </p>

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

<p style="margin-top:0;margin-bottom:0"><i>Estimating Useful Lives of
Property, Plant and Equipment</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 useful lives of our property, plant and equipment based on the
period over which our assets are expected to be available for use.  The
estimated useful lives of our property, plant and equipment are reviewed
periodically and are updated if expectations differ from previous estimates due
to physical wear and tear, technical or commercial obsolescence and legal or
other limits on the use of our assets.  In addition, our estimation of the
useful lives of our property, plant and equipment is based on our collective
assessment of industry practice, internal technical evaluation and experience
with similar assets.  It is possible, however, that future results of
operations could be materially affected by changes in our estimates brought
about by changes in factors mentioned above.  The amounts and timing of
recorded expenses for any period would be affected by changes in these factors
and circumstances.  A reduction in the
estimated useful lives of our property, plant and equipment would increase our
recorded operating expenses and decrease our noncurrent assets.  Total carrying
values of property, plant and equipment amounted to Php173,007 million and Php186,095
million as at December 31, 2005 and 2004, respectively.</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:auto' style="margin-top:0;margin-bottom:0">Asset Impairment </p>

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

<p 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 is also subject to a periodic impairment test.  Determining the fair
value of property, plant and equipment, investments and intangible assets
requires us to make estimates and assumptions, such as the determination of future
cash flows expected to be generated from the continued use and ultimate
disposition of such assets, that can materially affect our consolidated
financial statements.  Future events could cause us to conclude that property,
plant and equipment, investments and intangible assets 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="margin-top:0;margin-bottom:0">The determination 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.</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">Total
carrying values of goodwill and other intangible assets as at December 31, 2005
and 2004 amounted to Php16,875 million and Php16,561 million, respectively.</p>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:auto' style="margin-top:0;margin-bottom:0">Financial Assets and Liabilities</p>

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

<p style="margin-top:0;margin-bottom:0">U.S. GAAP requires that we carry
certain of our financial assets and liabilities at fair value, which requires
extensive use of accounting estimates and judgment.  While significant
components of fair value measurement were determined using verifiable objective
evidence (e.g., foreign exchange rates, interest rates, volatility rates), the
fair value would differ if we utilized different valuation methodology.  Any
changes in fair value of these financial assets and liabilities would affect
directly our profit and loss and equity.</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">Total fair value of financial assets and
liabilities as at December 31, 2005 amounted to Php42,717 million and Php149,593
million, respectively, while total fair value of financial assets and
liabilities as at December 31, 2004 amounted to Php43,273 million and Php198,249
million, respectively.</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>Estimating Allowance for Doubtful Accounts</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">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 where we have information that certain
customers are 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
affects the amounts estimated.  Second, a provision is established as a certain
percentage of operating revenues based on the aging profile of receivables.
This percentage is based on a collective assessment of historical collection,
write-off experience, current economic trends, changes in our customer payment
terms and other factors that may affect our ability to collect payments. </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 and carriers.  Such
permanent disconnections generally occur within 105 days from due date.
Partial allowance is provided for active subscribers and carriers based on the
age status of receivables.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The
amounts and timing of recorded expenses for any period would differ if we made
different judgments or utilized different estimates.  An increase in our
allowance for doubtful accounts would increase our recorded expenses and
decrease our current assets.  Provision
for doubtful accounts amounted to Php2,251 million, Php3,955 million and
Php4,092 million for the years ended December 31, 2005, 2004 and 2003, respectively.  Trade and other receivables, net of allowance for doubtful accounts,
amounted to Php7,113 million and Php7,524 million as at December 31, 2005 and
2004, 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>Investments</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">The
various interests that we hold in companies are accounted for under three
methods:  consolidation, equity method and cost method.  The method of
accounting applied to investments involves an evaluation of the significant
terms of the investments that explicitly grant or suggest evidence of control
or significant influence over the operations of the investees.  Consolidated
investments include our controlled subsidiaries.  Investments in businesses
which we do not control but have the ability to exercise significant influence
over their operating and financial policies are accounted for using the equity
method.  Investments in businesses which we do not have the ability to exercise
significant influence over operating and financial policies are accounted for
using the cost method.</p>

<p style='text-indent:.5in;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"><i>Pension Cost and Other Retirement Benefits </i></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">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 17 &#150;
Employee Benefits </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.  Unrecognized net actuarial loss as at December 31,
2005 and 2004 amounted to Php116 million and Php89 million, respectively.  The
accrued benefit cost as at December 31, 2005 and 2004 amounted to Php2,142
million and Php2,128 million, respectively.</p>

<p style='text-indent:.5in;line-height:8.0pt' 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">Deferred Tax Assets</p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">We review the carrying amounts of our deferred tax
assets at each balance sheet date and recognize a valuation allowance to the
extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax assets to be utilized.
However, there is no assurance that we will generate sufficient taxable profit
to allow all or part of our deferred tax assets to be utilized.  Significant
changes in our judgments and assumptions may materially affect the reported
amounts of our valuation allowance and the carrying amounts of our deferred tax
assets.</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">As
at December 31, 2005 and 2004, our deferred tax assets amounted to Php23,405
million and Php20,027 million, respectively, net of valuation allowance
amounting to Php5,857 million and Php13,663 million, respectively.</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>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 </p>

<p style="margin-top:0;margin-bottom:0">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 statements.  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 &#151; Taxation.&#148;  </p>

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

<p style="margin-top:0;margin-bottom:0">Impact of Recently
Issued Accounting Pronouncements</p>

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

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">In November 2005, the Financial Accounting Standards Board
issued Staff Position, or FSP, 115-1, &#147;The Meaning of Other-Than-Temporary
Impairment and Its Application to Certain Investments.&#148;  FSP 115-1 provides
guidance for determining when an investment is considered impaired, whether
impairment is other-than-temporary, and measurement of an impairment loss.  An
investment is considered impaired if the fair value of the investment is less
than its cost.  Please see <i>Note 3 &#150; Summary of Significant Accounting
Policies and Practices</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-top:0;margin-bottom:0"><a name="_Toc75779216"></a><a name="_Toc46082275">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='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have reclassified certain accounts in 2004 and 2003
to conform with our 2005 financial statement presentation.</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">The following table shows the
contribution by each of our business segments to our consolidated operating
revenues, expenses and net income (loss) for each of the years ended December 31, 2005, 2004 and 2003.  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='height:19.35pt'>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:19.35pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:8.0pt;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;padding:0in 5.4pt 0in 5.4pt;height:19.35pt'>
 <p align=center style='text-align:center;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Wireless</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:19.35pt'>
 <p align=center style='text-align:center;line-height:8.0pt;
 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:19.35pt'>
 <p align=center style='text-align:center;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Fixed Line</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:19.35pt'>
 <p align=center style='text-align:center;line-height:8.0pt;
 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:19.35pt'>
 <p align=center style='text-align:center;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>ICT</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:19.35pt'>
 <p align=center style='text-align:center;line-height:8.0pt;
 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:19.35pt'>
 <p align=center style='text-align:center;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Inter-segment</b></p>
 <p align=center style='text-align:center;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Transactions</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:19.35pt'>
 <p align=center style='text-align:center;line-height:8.0pt;
 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:19.35pt'>
 <p align=center style='text-align:center;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:.15in'>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=9 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <p align=center style='text-align:center;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">For the year ended December 31, 2005</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Operating Revenues </p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php76,906</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php49,472</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php3,305</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php6,348)</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php123,335</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:22.5pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Service</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">74,195</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">49,431</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,953</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,231)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">120,348</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:22.5pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Non-service</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,711</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">41</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">352</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(117)</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,987</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Operating Expenses</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">39,436</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">38,832</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,253</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,700)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">74,821</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;line-height:
 8.0pt' style="margin-top:0;margin-bottom:0">Net Income </p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">35,830</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,660</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">113</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E6E6E6;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">40,603</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:8.0pt' style="margin-top:0;margin-bottom:0">For
 the year ended December 31, 2004</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Operating Revenues </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">74,764</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48,546</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,401</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,538)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">121,173</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:22.5pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Service</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">68,653</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48,546</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,080</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,375)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">114,904</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:22.5pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Non-service</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,111</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">321</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(163)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,269</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Operating Expenses</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">41,598</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32,027</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,035</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,026)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">72,634</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;line-height:
 8.0pt' style="margin-top:0;margin-bottom:0">Net Income (Loss) </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27,559</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,241</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style=';text-align:right;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(699)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 line-height:8.0pt;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;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">28,101</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:8.0pt' style="margin-top:0;margin-bottom:0">For
 the year ended December 31, 2003</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;
 height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Operating Revenues </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">65,183</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,820</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,783</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,586)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">111,200</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:22.5pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Service</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">54,635</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,820</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,467</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,436)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100,486</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:22.5pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Non-service</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,548</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">316</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,714</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">Operating Expenses</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,264</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32,303</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,272</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,018)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">77,821</p>
 </td>
 </tr>
 <tr style='height:10.1pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;line-height:
 8.0pt' style="margin-top:0;margin-bottom:0">Net Income (Loss) </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,275</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style=';text-align:right;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,902)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style=';text-align:right;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(328)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 line-height:8.0pt;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;height:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 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:10.1pt'>
 <p align=right style='text-align:right;line-height:8.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,045</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>2005 Compared to 2004</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"><b>On a Consolidated Basis</b></p>

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

<p style="margin-top:0;margin-bottom:0"><b><i>Consolidated Operating
Revenues</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">Largely
driven by the growth of our wireless business, our consolidated operating
revenues for 2005 increased by Php2,162 million, or 2%, to Php123,335 million
in 2005 from Php121,173 million in 2004.  This increase was lower than the increase in our
consolidated operating revenues in 2004, primarily due to the reduced growth of
our cellular subscriber base in 2005 compared to 2004.  The revenue contribution of our wireless business
accounted for 62% of our consolidated operating revenues for 2005 and 2004.</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">The following table shows the breakdown of our
consolidated operating revenues for the years ended December 31, 2005 and 2004 by business segment:</p>

<p style='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:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=12 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:9.35pt'>
 <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:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Change</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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;height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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;height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php76,906</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php74,764</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php2,142</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">49,472</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">40</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">48,546</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">40</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">926</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,305</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,401</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">904</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inter-segment revenues</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.35pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,348)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;height:
 9.35pt'>
 <p align=right style='margin-right:.7pt;text-align:right;
 text-indent:9.35pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='text-align:right;text-indent:9.35pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,538)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;height:
 9.35pt'>
 <p align=right style='text-align:right;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;height:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,810)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;height:
 9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">40</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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;
 height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php123,335</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php121,173</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,162</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</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="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 Expenses</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">Our consolidated operating expenses in 2005 increased
by Php2,187 million, or 3%, to Php74,821 million from Php72,634 million in 2004.
The increase was primarly due to higher operating expenses associated with our
fixed line business and our information and communications technology business,
partially offset by a decrease in operating expenses associated with our
wireless business.  As a percentage of our consolidated operating revenues,
consolidated operating expenses increased to 61% from 60% in 2004.</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 the breakdown of our
consolidated operating expenses for the years ended December 31, 2005 and 2004 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'>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=12 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:9.35pt'>
 <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:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Change</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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;height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Wireless </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php39,436</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php41,598</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">57</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php2,162)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 text-indent:9.35pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">38,832</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">32,027</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">44</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,805</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">21</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,253</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,035</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">218</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inter-segment revenues</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 text-indent:9.35pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,700)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:.7pt;text-align:right;
 text-indent:9.35pt;line-height:8.0pt;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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;
 height:9.35pt'>
 <p align=right style='text-align:right;text-indent:9.35pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,026)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:.7pt;text-align:right;
 text-indent:9.35pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.35pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,674)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">66</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php74,821</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php72,634</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php2,187</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</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='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"><b><i>Consolidated Operating Income</i></b></p>

<p style='line-height:8.0pt' 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">Our consolidated operating income in 2005 was Php48,514
million, a decrease of Php25 million compared to Php48,539 million in 2004 as a
result of a 3% increase in our consolidated operating expenses which more than
offset the 2% increase in our consolidated operating revenues.</p>

<p style='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"><b><i>Consolidated Financing Costs</i></b></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">Financing
costs on a consolidated basis decreased by Php11,873 million, or 69%, to Php5,224
million primarily due to higher foreign exchange gains pertaining to the
foreign exchange revaluation of the carrying values of financial liabilities
because the level of peso appreciation was higher in 2005 as compared to 2004
and lower interest expense and related items owing to lower debt balances in
2005 compared with 2004.</p>

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

<p style="margin-top:0;margin-bottom:0"><b><i>Consolidated Interest
Income</i></b></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">Interest
income on a consolidated basis increased by Php515 million, or 55%, to Php1,457
million in 2005 from Php942 million in 2004 mainly attributable to higher
average cash balances.</p>

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

<p style="margin-top:0;margin-bottom:0"><b><i>Consolidated Other Income
- - Net</i></b></p>

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

<p style='text-indent:.5in;line-height:normal' style="margin-top:0;margin-bottom:0">Other income on a
consolidated basis totaled Php1,016 million in 2005, a decrease of Php1,514
million, or 60%, compared to Php2,530 million in 2004.  The decrease was mainly
due to the recognition of a gain on debt restructuring transaction conducted by
Smart in 2004 pertaining to a wireless business with no similar gain in 2005.  </p>

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

<p style="margin-top:0;margin-bottom:0"><b><i>Consolidated I</i></b><b><i>ncome Before Income Tax, Cumulative Effect of Change
in Accounting Policy and Minority Interest in Net Loss (Income) of Consolidated
Subsidiaries </i></b></p>

<p 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 policy and minority interest in net loss
(income) of consolidated subsidiaries in 2005 was Php45,770 million, an
increase of Php10,930 million, or 31%, from Php34,840 million in 2004,
primarily due to the significant decline in our financing costs owing to
substantial foreign exchange gains recognized in 2005.</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>Provision for Income Tax</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">Provision
for income tax decreased by Php1,977 million, or 29%, to Php4,849 million in
2005 compared to Php6,826 million in 2004 <a name="OLE_LINK11"></a><a
name="OLE_LINK10">mainly due to lower non-tax deductible charges </a>and the net movement in deferred tax assets as previously unrecognized deferred tax assets were
taken-up in 2005 with the increased likelihood that Smart and Piltel would be
able to realize the future tax benefits on these assets.  We currently expect
that our effective corporate tax rate will be higher going forward than in
previous years due to the expiration of Smart&#146;s income tax holiday.</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>Consolidated Net Income</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">As a
result, our consolidated net income in 2005 was Php40,603 million, an increase
of Php12,502 million, or 44%, compared to Php28,101 million in 2004.  The
following table shows the breakdown of our consolidated net income (loss) for
the years ended December 31, 2005 and 2004 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'>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Change</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;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:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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;
 height:9.35pt'>
 <p align=center style='text-align:center;text-indent:9.0pt;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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;height:9.35pt'>
 <p align=right style='margin-right:10.55pt;text-align:right;
 text-indent:2.65pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php35,830</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">88</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:10.2pt;text-align:right;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php27,559</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">98</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:8.0pt;text-align:right;
 text-indent:1.1pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php8,271</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">30</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:10.55pt;text-align:right;
 text-indent:2.65pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,660</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">12</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:10.2pt;text-align:right;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,241</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:8.0pt;text-align:right;
 text-indent:1.1pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,419</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">276</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;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 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:10.55pt;text-align:right;
 text-indent:2.65pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">113</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:.1in;text-align:right;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(699)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=center style=';text-align:center;
 text-indent:9.35pt;line-height:8.0pt;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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:8.0pt;text-align:right;
 text-indent:1.1pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">812</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">116</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='text-indent:9.0pt;line-height:8.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Total</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:9.35pt'>
 <p align=right style='margin-right:10.55pt;text-align:right;
 text-indent:2.65pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php40,603</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:10.2pt;text-align:right;
 line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php28,101</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:8.0pt;text-align:right;
 text-indent:1.1pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php12,502</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;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:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:9.0pt;line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">44</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>On Business Segment Basis</b></p>

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

<p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b>Wireless</b></p>

<p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.2in;
margin-bottom:.0001pt;text-indent:0in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Operating Revenues </i></h3>

<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">Our wireless business segment offers cellular services
as well as satellite, VSAT, wireless broadband and other services.</p>

<p style='margin-left:0in;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 summarizes our total operating service and non-service revenues
from our wireless business for the years ended December 31, 2005 and 2004 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:98.98%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p style='margin-right:13.2pt;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:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Service Revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;text-indent:9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cellular </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php71,518</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">93</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php66,421</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">89</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php5,097</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;text-indent:9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Satellite, VSAT, wireless broadband and
 others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,677</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:
 9.35pt'>
 <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=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,232</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-right:2.9pt;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;height:
 9.35pt'>
 <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;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">445</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:4.5pt;text-indent:9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #D9D9D9;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">74,195</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">96</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;background:
 #D9D9D9;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">68,653</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-right:2.9pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">92</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,542</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:4.5pt;text-indent:9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Non-service Revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:4.5pt;text-indent:.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Sale
 of cellular handsets and SIM-packs</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,711</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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:#D9D9D9;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <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=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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:#D9D9D9;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,111</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-right:2.9pt;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;height:
 9.35pt'>
 <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:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,400)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:.7pt;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;height:9.35pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(56)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0">Total
 Wireless Operating Revenues </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php76,906</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php74,764</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-right:2.9pt' 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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">Php2,142</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' 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;height:9.35pt'>
 <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>
 </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">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">Our wireless service revenues increased by Php5,542
million, or 8%, to Php74,195 million in 2005 compared to Php68,653 million in
2004 mainly as a result of the continued growth of Smart&#146;s and Piltel&#146;s
subscriber base.  However, the
growth in Smart&#146;s and Piltel&#146;s subscriber base in 2005 was lower than
the increases in Smart&#146;s and Piltel&#146;s subscriber base of 48% and 51% in 2004
and 2003, respectively.  As a
percentage of our total wireless operating revenues, wireless service revenues
increased to 96% in 2005 from 92% in 2004. </p>

<p style='text-indent:.5in;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>Cellular Service</i></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-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Unless otherwise indicated, the financial data and
operating metrics cited in the cellular service section reflect the
consolidated results of our cellular subsidiary, Smart and its subsidiary,
Piltel.</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;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">Our cellular service revenues consist of:
</p>

<p style='margin-left:.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;
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='margin-left:.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;
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 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='margin-left:.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;
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 service; 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;
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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our cellular service revenues in 2005 amounted to Php71,518
million, an increase of Php5,097 million, or 8%, from Php66,421 million in
2004.  Cellular service revenues accounted for 93% and 89% of our total
wireless operating revenues in 2005 and 2004, respectively.  The increase in
cellular service revenues was primarily due to the continued growth of Smart&#146;s
and Piltel&#146;s subscriber base.  As at December 31, 2005, the combined cellular subscribers of Smart and Piltel reached 20,408,621, an increase of 1,200,389, or
6%, over their combined cellular subscriber base of 19,208,232 as at December 31, 2004.  Prepaid and postpaid net subscriber activations totaled 1,194,805 and
5,584, respectively, in 2005.  However,
the growth in Smart&#146;s and Piltel&#146;s subscriber base in 2005 was lower than the increases in Smart&#146;s and Piltel&#146;s
subscriber base of 48% and 51% in 2004 and 2003, respectively.</p>

<p style='line-height:8.0pt' 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">The table below shows our cellular subscribers base as
at December 31, 2005 and 2004:</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:97.12%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:justify;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='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>As at 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</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;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>2005</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>2004</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=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:2.9pt;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:2.9pt;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:2.9pt;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:2.9pt;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:2.9pt;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:2.9pt;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:2.9pt;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=';text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cellular subscriber base </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">20,408,621</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">19,208,232</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">1,200,389</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">6</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' 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">20,128,543</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">18,933,738</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">1,194,805</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">6</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:
 9.0pt' 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">15,144,118</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">14,321,288</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">822,830</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">6</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:
 9.0pt' style="margin-top:0;margin-bottom:0">Piltel</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">4,984,425</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">4,612,450</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">371,975</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=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">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">280,078</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">274,494</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">5,584</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">2</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Of our 20,408,621 subscribers as at December 31, 2005, prepaid subscribers accounted for approximately 99% while postpaid
subscribers accounted for the remaining 1%.  Our cellular prepaid subscriber
base grew by 6% to 20,128,543 as at December 31, 2005 from 18,933,738 as at
December 31, 2004, whereas our postpaid subscriber base increased by 2% to
280,078 as at December 31, 2005 from 274,494 as at December 31, 2004.  Smart&#146;s
prepaid and postpaid net subscriber activations totaled 822,830 and 5,584,
respectively, in 2005, or a quarterly average addition of 205,707 prepaid and
1,396 postpaid subscribers.  On the other hand, Piltel&#146;s prepaid subscribers
increased by 8% to 4,984,425 as at December 31, 2005 from 4,612,450 as at
December 31, 2004, or a quarterly average addition of 92,994 subscribers.  Postpaid
subscribers as at December 31, 2005 were higher than as at December 31, 2004 primarily due to increased net activations in the last two quarters of 2005.</p>

<p style='line-height:8.0pt' 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">Our quarterly net subscriber activations (reductions)
over the eight quarters in 2005 and 2004 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:418.5pt;margin-left:24.85pt;border-collapse:collapse'>
 <tr style='height:9.35pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' 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;height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Prepaid</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Postpaid</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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='height:9.35pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Smart</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Piltel</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Smart</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">First Quarter</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">920,885</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">129,753</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:11.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,357)</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;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;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,044,281</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Second Quarter</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">314,607</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">222,233</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">116</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;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;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">536,956</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Third Quarter</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:11.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(53,953)</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">42,723</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,506</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;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;
 height:9.35pt'>
 <p align=right style='margin-right:11.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(724)</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fourth Quarter</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:11.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(358,709)</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:11.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(22,734)</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,319</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:12.6pt;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;
 height:9.35pt'>
 <p align=right style='margin-right:11.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(380,124)</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </td>
 <td  style=' padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:.2in;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;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;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;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">First Quarter</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,162,301</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">218,038</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,866</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;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;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,397,205</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Second Quarter</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,207,542</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">468,772</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,691</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;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;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,684,005</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Third Quarter</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">797,686</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">635,978</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,445</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;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;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,444,109</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fourth Quarter</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,322,624</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">422,577</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:11.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9,485)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;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;
 height:9.35pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,735,716</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">Satellite,
VSAT, Wireless Broadband and Other Services</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">Our revenues from satellite, VSAT,
wireless broadband 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 wireless broadband service revenues from Smart Broadband,
charges for ACeS Philippines&#146; satellite phone service and service revenues from
PLDT Global subsidiary&#146;s mobile virtual network operations.  Smart Broadband offers
a number of wireless broadband services with 25,428 subscribers as of December 31, 2005, including 21,759 <i>Smart WiFi</i> subscribers.  </p>

<p style='margin-left:0in;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">Gross service revenues from these services for 2005
amounted to Php2,677 million, an increase of Php445 million, or 20%, from Php2,232
million in 2004.  This increase was primarily due to the growth in our wireless
broadband business.</p>

<p style='margin-left:0in;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"><i>Non-service Revenues</i></p>

<p style='margin-left:0in;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
wireless non-service revenues consist of:</p>

<p style='margin-left:0in;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;
proceeds from sale of cellular
handsets; and</p>

<p style='margin-left:0in;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;
proceeds from sale of cellular
SIM-packs.</p>

<p style='margin-left:0in;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 wireless non-service revenues decreased by Php3,400
million, or 56%, to Php2,711 million in 2005 as compared to Php6,111 million
in 2004 mainly attributable to lower handset sales due to the fact that
activations in 2005 were primarily driven by more SIM-pack sales and SIM-swap
activities up to May 2005.  </p>

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

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:left;
text-indent:.3in;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Operating Expenses</i></h6>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
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">Operating expenses associated with our
wireless business in 2005 amounted to Php39,436 million, a decrease of Php2,162
million, or 5%, from Php41,598 million in 2004.  A significant portion of this
decrease was mainly attributable to decreases in costs of cellular handsets and
SIM-packs sold and selling and promotion, partially offset by higher rent, and professional
and other contracted sevices.  As a percentage of our total wireless operating
revenues, operating expenses associated with our wireless business decreased to
51% in 2005 from 56% in 2004.   </p>

<p style='margin-left:0in;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">Cellular business expenses accounted for 94% while
satellite, VSAT, wireless broadband and other business expenses accounted for 6%
of our wireless business expenses in 2005, compared to 93% and 7%,
respectively, in 2004.</p>

<p style='margin-left:0in;text-indent:.5in;line-height:
9.0pt' 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">The following table summarizes our wireless-related
expenses for the years ended December 31, 2005 and 2004 and the percentage of
each expense item to the total:</p>

<p style='margin-left:0in;text-indent:.5in;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:95.2%;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;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=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=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=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=3 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>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>2005</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=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>2004</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=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>Amount</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>
 </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>&nbsp;</b></p>
 </td>
 <td   colspan=11 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">(in millions)</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">Wireless 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 align=center style='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 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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation and amortization</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">Php9,200</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">23</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#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">Php10,082</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#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">24</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">&nbsp;</p>
 </td>
 <td   valign=top 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">(Php882)</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">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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">(9)</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">Costs of cellular handsets and SIM-packs sold</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">5,827</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">15</p>
 </td>
 <td   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">10,599</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">25</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:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,772)</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">(45)</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">Rent</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">5,577</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">14</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#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">4,156</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#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">10</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">&nbsp;</p>
 </td>
 <td   valign=top 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">1,421</p>
 </td>
 <td   valign=top 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>
 <td   valign=top style=' background:#E0E0E0;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">34</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(1)</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">4,245</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">11</p>
 </td>
 <td   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">3,195</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">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;
 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">1,050</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">33</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.65pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:7.65pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Repairs
 and maintenance</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,667</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:7.65pt'>
 <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;height:7.65pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:7.65pt'>
 <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;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,597</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:7.65pt'>
 <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;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.65pt'>
 <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;height:7.65pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1,070</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.65pt'>
 <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;
 height:7.65pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">41</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' 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">3,124</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">8</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">4,261</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">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' 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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,137)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(27)</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' style="margin-top:0;margin-bottom:0">Professional
 and other contracted services</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">1,608</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">4</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">472</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1,136</p>
 </td>
 <td   valign=top style=' 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">&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">241</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' style="margin-top:0;margin-bottom:0">Taxes
 and licenses</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">1,538</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">4</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">1,214</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">324</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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">27</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' style="margin-top:0;margin-bottom:0">Cost
 of satellite air time</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">1,008</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">1,299</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=top 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">&nbsp;</p>
 </td>
 <td   valign=top 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">(291)</p>
 </td>
 <td   valign=top style=' 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">&nbsp;</p>
 </td>
 <td   valign=top 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">(22)</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' style="margin-top:0;margin-bottom:0">Communication,
 training and travel</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">960</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=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">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">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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">169</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">21</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' style="margin-top:0;margin-bottom:0">Insurance
 and security services</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">947</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=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">937</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">10</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">1</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' 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">322</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">213</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=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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">109</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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">51</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' style="margin-top:0;margin-bottom:0">Provision
 for doubtful accounts</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">253</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=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">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">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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 <td   valign=top style=' 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">&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">24</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' style="margin-top:0;margin-bottom:0">Amortization
 of 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' style="margin-top:0;margin-bottom:0">189</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">93</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:1.45pt;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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">96</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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">103</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' 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: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">430</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:1.45pt;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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(430)</p>
 </td>
 <td   valign=top style=' 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">&nbsp;</p>
 </td>
 <td   valign=top 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">(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' 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">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=' 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=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">1,055</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=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(84)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(8)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.5pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:3.5pt'>
 <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 1.5pt;background:#E0E0E0;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">Php39,436</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;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 1.5pt;background:#E0E0E0;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:#E0E0E0;
 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 1.5pt;background:#E0E0E0;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">Php41,598</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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 1.5pt;background:#E0E0E0;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:#E0E0E0;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php2,162)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(5)</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-left:.25in;text-indent:-.25in;line-height:
3.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><i>(1)  Includes salaries and
benefits, incentive plan, pension and manpower rightsizing program, or MRP,
costs.</i></p>

<p style='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">Depreciation and amortization charges decreased by Php882 million,
or 9%, to Php9,200 million substantially due to a decrease in the
depreciable asset base as certain of our wireless assets were fully depreciated
by the end of 2005.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Costs
of cellular handsets and SIM-packs sold decreased by Php4,772 million, or 45%,
to Php5,827 million as activations in 2005 were primarily driven by more
SIM-pack sales and SIM-swap activities compared to handset sales 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">Rent
expenses increased by Php1,421 million, or 34%, to Php5,577 million on account
of an increase in the number of DFON facilities leased by Smart from PLDT and
site rental expense.  As at December 31, 2005, we had 4,305 cell sites and
5,982 base stations, compared with 3,951 cell sites and 5,303 base stations as
at December 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">Compensation
and benefits increased by Php1,050 million, or 33%, to Php4,245 million
primarily due to salary increases and higher long-term incentive costs of Smart.  On
the other hand, Smart's employee headcount decreased by 3% to 5,087 as at December
31, 2005 from 5,239 as at December 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">Repairs
and maintenance expenses increased by Php1,070 million, or 41%, to Php3,667
million mainly on account of higher repairs and maintenance costs, and higher
site electricity and power generation expenses due to, and in line with, the
continued growth in the number of cell sites and other network facilities.  </p>

<p 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 Php1,137 million, or 27%, to Php3,124
million due to efficient media spending and termination of certain media
contracts in 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">Professional
and other contracted services increased by Php1,136 million, or 241%, to
Php1,608 million mainly as a result of increased legal, technical service, and call
center and payment facilities fees.</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">Taxes
and licenses increased by Php324 million, or 27%, to Php1,538 million mainly
due to an increase in Smart&#146;s business-related taxes.  </p>

<p 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 decreased by Php291 million, or 22%, to Php1,008 million
due to a change in the basis of recognizing air time cost.  In 2004, satellite
air time cost was accrued at a fixed amount per month based on the payment
schedule in a standstill agreement in consideration for unlimited air time
access.  In 2005, upon the termination of the standstill agreement, air time
cost was reverted to the original charging rate on a per minute basis.  This
was agreed to be the basis of air time cost until a new agreement is
finalized.  </p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Communication,
training and travel increased by Php169 million, or 21%, to Php960 million due
to higher local travel and training costs, as well as an increase in delivery,
freight and hauling expenses incurred in 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">Insurance
and security services increased by Php10 million, or 1%, to Php947 million mainly due to the increase in our number of cell sites
and in the amount of network equipment insured as a result of, and in line
with, the continued growth and expansion of our network.</p>

<p style='margin-left:0in;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">Provision for inventory obsolescence increased by
Php109 million, or 51%, to Php322 million, primarily due to slow sales of handsets
relating to ACeS Philippines in 2005.</p>

<p style='margin-left:0in;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">Provision for doubtful accounts increased by Php49
million, or 24%, to Php253 million in 2005 mainly due to a net reversal of
provisions for carrier accounts in 2004 following subsequent collections from
such carrier accounts.</p>

<p style='margin-left:0in;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 intangible assets increased by Php96 million, or 103%,
to Php189 million in 2005, primarily due to the full year effect of the amortization
of intangibles incurred in acquiring equity interests in Smart Broadband and
Wolfpac by Smart 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">No
impairment charges were recognized in 2005.  Asset impairment charges amounted
to Php430 million in 2004 due to impairment losses recognized in respect of
Mabuhay Satellite&#146;s investment in an investee 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">Other
operating expenses decreased by Php84 million, or 8%, to Php971 million due to a decrease
in various business and operational-related expenses such as office supplies
expense.</p>

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

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0"><b><i>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">Operating income from our wireless business amounted to Php37,470
million in 2005, an increase of Php4,304 million, or 13%, from Php33,166
million in 2004, which was primarily due to increased revenues, mainly from our
cellular services, complemented by lower operating expenses.  </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 Costs</i></b></p>

<p style='page-break-after:avoid' 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">Financing
costs associated with our wireless business changed by Php2,974 million, or 130%,
to a financing gain of Php689 million in 2005, primarily due to higher foreign
exchange gains as a result of the 6% and 18% level of appreciation of the Philippine
peso to the U.S. dollar and Japanese yen, respectively, from December 31, 2004
to December 31, 2005.  Foreign exchange losses recorded in 2004 with the peso
depreciation of 1% against the U.S. dollar, aggravated by the peso depreciation
with approximately 8% against the Japanese yen from December 31, 2004 and December 31, 2005.  In addition, lower debt balances in 2005 also contributed to
decreased interest expense on loans.  The breakdown of our financing costs for
our wireless business for the years ended December 31, 2005 and 2004 is 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:6.25in;margin-left:5.4pt;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <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  colspan=7 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 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;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-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: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: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  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 5.4pt 0in 5.4pt'>
 <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 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>2005</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>2004</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>Amount</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>%</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  colspan=7 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">(in millions)</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">Interest on loans and related items</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">Php1,037</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1,082</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">(Php45)</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">(4)</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">Accretion on financial liabilities</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">248</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">884</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">&nbsp;</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">(636)</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">&nbsp;</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">(72)</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">(Gain) loss on derivative transactions &#150; net</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">118</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='margin-right:.7pt;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='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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">125</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='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,786</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">Financing charges</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">52</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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">51</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">5,100</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">Capitalized interest</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">(85)</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='margin-right:.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(98)</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(13)</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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Foreign exchange losses (gain) &#150; net</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,059)</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='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 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">423</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='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 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">(2,482)</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='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 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">(587)</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">&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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php689)</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=' 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php2,285</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=' 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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php2,974)</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=' 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:.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(130)</p>
 </td>
 </tr>
</table></center></div>

<p style='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"><b><i>Interest Income</i></b></p>

<p style='margin-left:0in;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">Interest income generated by our wireless business
amounted to Php1,057 million in 2005, an increase of Php333 million, or 46%,
compared to Php724 million in 2004 mainly attributable to Smart&#146;s higher
average cash balances.</p>

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

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:left;
punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Other Income - net</i></h6>

<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 generated other income -
net of Php1,292 million in 2005, a decrease of Php638 million, from Php1,930
million in 2004.  This decrease was primarily a result of a Php2,820 million
gain on a debt restructuring transaction conducted by Smart in 2004 pertaining
to our wireless business.  See <i>Note 12 &#150; Interest-bearing Financial
Liabilities &#150; Term Loans &#150; US$283 Million Term Loan Facility, or Debt Exchange
Facility </i>to the accompanying consolidated financial statement in Item 18.</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>Income Before Income
Tax, Cumulative Effect of Change in Accounting Policy and Minority Interest in
Net Income (Loss) of Consolidated Subsidiaries</i></b></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">Income
before income tax, cumulative effect of change in accounting policy and
minority interest in net income (loss) of consolidated subsidiaries increased
by Php7,045 million, or 21%, to Php40,508 million in 2005 compared to Php33,463
million in 2004, mainly due to a 3% increase in wireless operating revenues,
principally from our cellular business, resulting from the continued cellular
subscriber growth, as well as a decrease in our wireless business expenses of 5%
in 2005.</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>Provision for Income
Tax</i></b></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">Provision for income tax decreased by Php1,682
million, or 28%, to Php4,285 million in 2005 from Php5,967 million in 2004 mainly
due to lower non-tax deductible charges and
the net movement in deferred tax assets as previously unrecognized deferred tax
assets were taken-up in 2005 with the increased likelihood that Smart and
Piltel would be able to realize the future tax benefits on these assets.  We
currently expect that our effective corporate tax rate will be higher going
forward than in previous years due to the expiration of Smart&#146;s income tax
holiday. </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>Net Income</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
wireless business segment recorded a net income of Php35,830 million in 2005,
an increase of Php8,271 million, or 30%, over Php27,559 million registered in
2004 primarily due to the 6% growth in our cellular subscriber base,
complemented by a 5% decrease in wireless expenses.</p>

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

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:left;
text-indent:.3in;page-break-after:auto;punctuation-wrap:hanging;text-autospace:
ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">Fixed Line</h6>

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

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

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

<p style='margin-left:0in;text-indent:.5in' 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.  Operating revenues generated
from our fixed line business for 2005 totaled Php49,472 million, an increase of
Php926 million, or 2%, from Php48,546 million in 2004.  This increase was primarily due to higher revenues
generated from data and other network services, and miscellaneous revenues, which
was partially offset by decreased revenues from national long distance
services, international long distance services and local exchange service.  As
a percentage of our total operating revenues, fixed line revenues decreased to 38%
in 2005 from 39% in 2004, principally due to the continued growth of our
wireless business.  </p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal' 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 total operating
revenues from our fixed line business for the years ended December 31, 2005 and
2004, respectively, by service segment:</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:95.2%;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=' 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>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>2005</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>2004</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-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='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=9 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">(in millions)</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=' 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=' 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='margin-left:13.5pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Service Revenues</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: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: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: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: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: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: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">&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">&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;
 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:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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">Php20,229</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">40</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">Php20,606</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">42</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=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">(Php377)</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">(2)</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,245</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:5.75pt;text-align:right;
 page-break-after:avoid' 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: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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,804</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:5.75pt;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: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">(559)</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">(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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,254</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">11</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">6,736</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">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=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">(1,482)</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">(22)</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,394</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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21</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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,114</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: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 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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,280</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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#D9D9D9;
 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">Miscellaneous</p>
 </td>
 <td   valign=bottom 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'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,309</p>
 </td>
 <td   valign=bottom 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=bottom 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'>
 <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=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:5.75pt;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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !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">1,286</p>
 </td>
 <td   valign=bottom 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=bottom 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'>
 <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 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=bottom 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'>
 <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>
 <td   valign=bottom 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=bottom 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'>
 <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=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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;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">49,431</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=' border:none;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">100</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:5.75pt;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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48,546</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=' border:none;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">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;
 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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">885</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=' border:none;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</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Non-Service Revenues</p>
 </td>
 <td   valign=bottom 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=bottom 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=bottom 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=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:5.75pt;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 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=bottom 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=bottom 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">&nbsp;</p>
 </td>
 <td   valign=bottom 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=bottom 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=bottom 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>
 </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">Sale of cellular handsets</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">41</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=' 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">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:5.75pt;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:5.75pt;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:5.75pt;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:5.75pt;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:5.75pt;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:5.75pt;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 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=' 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">100</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0">Total
 Fixed Line Operating Revenues </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:#D9D9D9;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' style="margin-top:0;margin-bottom:0">Php49,472</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !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 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'>
 <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:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !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 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'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php48,546</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !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 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'>
 <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'>
 <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:#D9D9D9;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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php926</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <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;
 border:none !msorm;border-bottom:double windowtext 2.25pt !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">2</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.2in;
margin-bottom:.0001pt;text-indent:-.2in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Service Revenues</i></h3>

<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>Local Exchange 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 local exchange service revenues consist of: </p>

<p style='line-height:8.0pt;page-break-after:avoid;
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='line-height:8.0pt;page-break-after:avoid;
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;
installation charges and other
one-time fees associated with the establishment of customer service;</p>

<p style='line-height:8.0pt;page-break-after:avoid;
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;
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;page-break-after:avoid;
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;
revenues from usage of prepaid
cards for calls within the local area and any unused peso value of expired
prepaid cards; and</p>

<p style='line-height:8.0pt;page-break-after:avoid;
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;
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='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">The
following table summarizes key measures of our local exchange service business
segment as at and for the years ended December 31, 2005 and 2004, respectively:</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:91.34%;border-collapse:collapse'>
 <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=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="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"><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-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>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <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 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2005</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>2004</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' 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' 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' 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' 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' 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' 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' 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' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:9.0pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0">Consolidated
 local exchange service revenues (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">Php20,229</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <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;height:9.0pt'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">Php20,606</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.0pt'>
 <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;height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php377)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(2)</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 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' style="margin-top:0;margin-bottom:0">2,113,799</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">2,152,027</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=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">(38,228)</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>
 </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 fixed line 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">9,197</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">9,692</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=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">(495)</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">(5)</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 fixed lines in service per 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">230</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">222</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=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">8</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 </tr>
</table></center></div>

<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">Revenues from our local exchange service in 2005
decreased by Php377 million, or 2%, to Php20,229 million from Php20,606 million
in 2004.  The decrease was primarily due to a 2% decline in the number of fixed
lines in service and the appreciation of the peso against U.S. dollars which
required us to make downward adjustments in our monthly local service rates, which
was partially offset by adjustments in our monthly local service rates.  The
percentage contribution of local exchange revenues to our total fixed line
service revenues decreased to 40% in 2005 from 42% in 2004.</p>

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

<p style="margin-top:0;margin-bottom:0">Fixed line net
reductions in 2005 were 38,228 as compared to 33,924 in 2004.  While fixed line
additions totaled 7,706 for postpaid fixed line services, prepaid fixed lines
in service declined by 45,934 in 2005.  As at December 31, 2005, postpaid and
prepaid fixed line subscribers totaled 1,790,897 and 322,902, respectively,
which accounted for approximately 85% and 15%, respectively, of our total fixed
lines in service.</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 adjust our monthly local service rates
upward or downward by 1% for every Php0.10 change in the peso-to-U.S. dollar
exchange rate relative to a base rate of Php11.00 to US$1.00.  During 2005, we
implemented six downward and three upward adjustments in our monthly local
service rates compared to six upward and one downward adjustments in 2004.  The
average peso-to-U.S. dollar rate in 2005 was Php55.085 to US$1.00, compared to
the average of Php56.044 to US$1.00 in 2004.  This change in the average
peso-to-U.S. dollar rate translated to a peso appreciation of 2%, which
resulted in an average net decrease of 1% in our monthly local service rates in
2005. </p>

<p style='text-indent:.5in' 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='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 international long distance service revenues,
which we generate through our international gateway facilities, consist of:</p>

<p style='text-indent:.5in;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;
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='text-indent:.5in;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='text-indent:.5in;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-left:.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 information about our
international fixed line long distance business for the years ended December 31, 2005 and 2004, respectively:</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:94.24%;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>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>2005</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>2004</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=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=' 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=' 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=' 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">Total international
 long distance service 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">Php12,245</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">Php12,804</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">(Php559)</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:2.9pt;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4)</p>
 </td>
 </tr>
 <tr style='height:.1in'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:.1in'>
 <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;height:.1in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,203</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:.1in'>
 <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;height:.1in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,452</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:.1in'>
 <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;height:.1in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(249)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:.1in'>
 <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;
 height:.1in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2)</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">2,042</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">2,352</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(310)</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(13)</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=' 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=' 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=' 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=' 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=' 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=' 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=' padding:0in 0in 0in 0in'>
 <p align=right style=';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;text-indent:-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">2,226</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">2,348</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(122)</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5)</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;text-indent:-13.5pt;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">2,079</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">2,192</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:.05in;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='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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5)</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;text-indent:-13.5pt;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">147</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">156</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(9)</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6)</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;text-indent:-13.5pt;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">14.1:1</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">14.1:1</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=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">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:.05in;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:6.5pt;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;line-height:8.0pt' 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 total international long distance service revenues
decreased by Php559 million, or 4%, to Php12,245 million in 2005 from Php12,804
million in 2004 primarily due to the peso appreciation coupled with the
decrease in call volumes largely as a result of alternative means of
communications such as e-mailing, texting and Internet telephony.  The
percentage contribution of international long distance service revenues to our
fixed line service revenues decreased to 25% in 2005 from 26% in 2004.</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">Our
revenues from inbound international long distance service decreased by Php249
million due to a decrease in inbound traffic volume by 113 million minutes to
2,079 million minutes in 2005.  In addition, the 2% appreciation in the average
value of peso to U.S. dollar to Php55.085 during 2005 from Php56.044 during
2004 contributed to the decrease 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 time of billing.</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">Our revenues from outbound international long distance calls in
2005 decreased by Php310 million, or 13%, to Php2,042 million from Php2,352 million in
2004.  The decrease resulted from lower conversion rates used as average
billing rates were Php55.30 and Php55.98 in 2005 and 2004, 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">Our outbound international long distance call volumes declined by
6% to 147 million minutes in 2005 from 156 million minutes in 2004, 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, international text messaging and internet
telephony.</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"><b><i>&nbsp;</i></b></p>

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

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></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-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="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 service revenues and call volumes for the years ended December
31, 2005 and 2004, respectively:</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:98.08%;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=' 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"><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=' 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: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   colspan=3 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>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='height:9.6pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.6pt'>
 <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:9.6pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.6pt'>
 <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;height:9.6pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.6pt'>
 <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;height:9.6pt'>
 <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;
 height:9.6pt'>
 <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;height:9.6pt'>
 <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=' border:none;border-top:solid windowtext 1.0pt;
 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=' border:none;border-top:solid windowtext 1.0pt;
 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=' 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=' border:none;border-top:solid windowtext 1.0pt;
 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=' 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>
 </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:4.5pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Total national long distance service
 revenues (in millions)</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">Php5,254</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">Php6,736</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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php1,482)</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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0">(22)</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">National long distance call volumes (in million
 minutes)</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">1,904</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">1,853</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=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">51</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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' 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='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Our national long distance service revenues decreased
by Php1,482 million, or 22%, to Php5,254 million in 2005 from Php6,736 million
in 2004 as a result of: (1) a decrease in average revenue per minute due to our
fixed rate per call promotion starting February 14, 2005; and (2) the
integration of local exchanges into a single calling area, which resulted in
calls between two exchanges located within the same province no longer being
considered as national long distance calls, but rather as local calls.
Accordingly, the percentage contribution of national long distance revenues to
our fixed line service revenues decreased to 11% in 2005 compared to 14% 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">On
February 14, 2005, we launched a Php10 per call promotion to PLDT fixed line
subscribers nationwide and for calls to Smart and <i>Talk &#145;N Text</i>
subscribers.  This promotion was launched with the objective of determining a
more effective tariff structure that would stimulate fixed line usage.  Under
the promotion, NDD calls between any PLDT fixed line subscribers nationwide or from
any PLDT fixed line subscribers nationwide to any Smart and <i>Talk &#145;N Text</i>
subscribers were charged Php10 per call instead of being charged on a 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">On May 12, 2005, PLDT began offering the Php10 per call promotion with an additional Php5 per
call for the same unlimited talktime to Smart and <i>Talk &#145;N Text</i>
subscribers.  PLDT to PLDT NDD calls below the equivalent Php10 toll usage were
charged based on the regular rate per minute.  On August 12, 2005, PLDT ceased offering the Php10 per call promotion to calls terminating to Smart and <i>Talk &#145;N
Text</i> subscribers.  </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">Beginning
September 12, 2005, PLDT charged an optional Php20 add-on monthly service fee
for PLDT fixed line subscribers who may want to continue to avail themselves of
the Php10 per call promotion for calls within our network. </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">In
January 2006, PLDT launched the <i>10-10-10</i> promotion.  This promotion offers a flat rate of Php10 for unlimited calls of any PLDT fixed line subscribers
nationwide to PLDT, Smart and <i>Talk &#145;N Text </i>subscribers for a Php50
monthly service fee.  </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">Our
national long distance call volumes increased by approximately 3% to 1,904
million minutes in 2005 from 1,853 million minutes in 2004.  This was mainly
due to the Php10 per call promotion offered to PLDT fixed line subscribers
nationwide.  </p>

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

<p style="margin-top:0;margin-bottom:0">The integration of
some of our local exchanges into a single local calling area, as approved by
the NTC, 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="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='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 data and other network services in 2005 generated revenues
of Php10,394 million, an increase of Php3,280 million, or 46%, from Php7,114
million in 2004, which was primarily due to increases in revenues generated in leased
lines and IP-based data services, particularly Diginet and DSL.  The revenue
contribution of this service segment to our fixed line service revenues
increased to 21% in 2005 from 15% in 2004.</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">Data and other network services we currently provide
include leased lines, IP-based, packet-based and switch-based services.  These
services are used for domestic and international communications such as private
networking, broadband and narrowband Internet-based data communications, and
packet-based communication.  </p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Of
our total revenues generated in data and other network services in 2005, leased
lines accounted for 55%, IP-based services accounted for 29%, packet-based
services accounted for 11% and switched-based services accounted for the
remaining 5%, compared to 56%, 25%, 13% and 6%, respectively, in 2004.  These
percentage increases indicate a continuing demand for broadband services,
particularly the high bandwidth clear data requirements of business process
outsourcing companies, or BPOs, and call centers.  We expect this trend to
continue due to growth in the areas of e-commerce, online services and BPOs
particularly among call centers, medical transcription, animation and shared
services.</p>

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

<p style='margin-left:0in;text-indent:.5in;line-height:
93%' style="margin-top:0;margin-bottom:0">The continued growth in
data services revenues can be attributed to several product offerings.  The
steady demand for dedicated connectivity or private networking from the
corporate market using PLDT&#146;s traditional bandwidth offerings &#150; Fibernet,
Arcstar, Acacia, I-Gate, Diginet, BRAINS, among others &#150; continues to provide
us with a stable revenue source.  In addition, we provide Smart&#146;s increasing
fiber optic and leased line data requirements, which are included under our
national data 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='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">Miscellaneous service revenues are derived mostly from
directory advertising and facilities rental.  In 2005, these revenues increased
by Php23 million, or 2%, to Php1,309 million from Php1,286 million in 2004.
The improvement was mainly due to an increase in co-location charges from more
co-location sites coupled with an increase in rent income on duct utilization
and cable restoration.  The percentage contribution of miscellaneous service
revenues to our fixed line service revenues was 3% in 2005 and 2004.</p>

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

<p style='margin:0in;margin-bottom:.0001pt;text-indent:0in;page-break-after:
auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Operating Expenses</i></h3>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Operating
expenses related to our fixed line business in 2005 totaled Php38,832 million,
an increase of Php6,805 million, or 21%, compared to Php32,027 million in
2004.  The increase was primarily due to higher depreciation and amortization
and higher selling and promotions expenses which were partially offset by lower
provision for doubtful accounts expense.</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 sets forth the breakdown of our
total fixed line-related expenses for the years ended December 31, 2005 and 2004, respectively, 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:93.26%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=9 valign=bottom style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation and amortization</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php18,240</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">Php9,677</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">30</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php8,563</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">88</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Compensation and benefits(1)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">8,261</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">22</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">7,921</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">25</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">340</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Repairs and maintenance</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,297</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">3,211</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">86</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,944</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">3,751</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">12</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,807)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(48)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,727</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <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 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1,746</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,535</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1,159</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">376</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Professional and other contracted services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,039</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1,060</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(21)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">942</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <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=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">820</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">122</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Insurance and security services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">628</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <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=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">700</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;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:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(72)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(10)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Communication, training and travel</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">447</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">449</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">157</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">361</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(204)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(57)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost of Sales</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Asset impairment </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">365</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(365)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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:#D9D9D9;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">562</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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:#D9D9D9;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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:#D9D9D9;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">807</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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:#D9D9D9;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:#D9D9D9;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(245)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:
 9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(30)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php38,832</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">Php32,027</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php6,805</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">21</p>
 </td>
 </tr>
</table></center></div>

<p style='line-height:150%;punctuation-wrap:hanging;
text-autospace:ideograph-numeric ideograph-other;border:none' style="margin-top:0;margin-bottom:0">____________</p>

<p style="margin-top:0;margin-bottom:0"><i>(1)  Includes salaries and
benefits, incentive plan, pension and MRP costs.</i></p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Depreciation
and amortization charges increased by Php8,563 million, or 88%, to Php18,240
million mainly due to the effect of our change in estimated useful lives of
certain property, plant and equipment in line with our continuous network
upgrade and expansion, which resulted in increased depreciation charges for
2005, and higher depreciation of our regular asset base primarily resulting
from additional completed projects.</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">Compensation and benefits expenses increased by Php340
million, or 4%, to Php8,261 million primarily due to the effect of the
collective bargaining agreement-related increases in salaries and benefits and
an increase in incentive plan-related accruals, partially offset by a reduction
in headcount due to PLDT&#146;s manpower rightsizing program.</p>

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

<p style='margin-left:0in;text-indent:.5in;line-height:
94%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Repairs
and maintenance expenses increased by Php86 million, or 3%, to Php3,297 million
primarily due to higher maintenance costs for foreign cable and wire facilities
as more operating and maintenance-related restorations were incurred in 2005 as
compared to 2004.  </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">Provision
for doubtful accounts decreased by Php1,807 million, or 48%, to Php1,944
million, primarily on account of a lower provision by PLDT for anticipated
uncollectible accounts from various specifically identified domestic
telecommunications carriers which were provided for in 2004. </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">Rent expenses decreased by Php19 million, or 1%, to
Php1,727 million due to a decrease in international leased circuits and rental
charges occupied by various equipments, partially offset by higher rentals for
bundled sales/value added service units.</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">Selling and promotion expenses increased by Php376
million, or 32%, to Php1,535 million, primarily as a result of an increase in
PLDT&#146;s promotional activities in relation to various products and services,
partially offset by lower commissions paid in 2005.</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">Professional and other contracted services decreased
by Php21 million, or 2%, to Php1,039 million primarily due to lower advisory
and legal fees in 2005 for various services, partially offset by an increase in
facility management fees and collection agency 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">Taxes
and licenses increased by Php122 million, or 15%, to Php942 million mainly on
account of higher NTC supervision and license fees, fringe benefit taxes in
respect of our stock option plan and other business-related taxes paid in 2005
as compared to 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">Insurance
and security services decreased by Php72 million, or 10%, to Php628 million,
primarily due to lower premiums on property all-risk, industrial all-risk and
industrial fire insurance, partially offset by higher security services due to
a rate increase for contracted security guards.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Communication,
training and travel expenses decreased by Php2 million to Php447 million due to
a decrease in mailing, courier and delivery services, as well as a decrease in
local travel and training in 2005 as compared to 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">Provision
for inventory obsolescence decreased by Php204 million, or 57%, to Php157
million primarily on account of lower inventory obsolescence owing to slow-moving
items determined in 2005 as compared to 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">Cost
of sales amounting to Php53 million were recognized in 2005 in relation to our
DSL promotion.  No similar charges were incurred 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">Asset
impairment amounted to Php365 million in 2004 owing to an impairment of a fixed
line subsidiary&#146;s facilities; no impairment charge was recognized in 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">Other
operating expenses decreased by Php245 million, or 30%, to Php562 million due
to lower office supplies consumption and printing costs resulting from PLDT&#146;s
continuing cost-containing activities.</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>Operating Income</i></b></p>

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

<p style="margin-top:0;margin-bottom:0">Operating income from our fixed
line service amounted to Php10,640 million in 2005, a decrease of Php5,879
million, or 36%, from Php16,519 million in 2004, which was primarily due to an increase
in fixed line-related expenses particularly increased depreciation, which more
than offset the 2% increase in fixed line-related revenues.</p>

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

<p style='text-indent:0in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Financing Costs</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">Financing
costs decreased by Php8,962 million, or 60%, to Php5,859 million due to: (1)
the strengthening of the peso relative to the U.S. dollar and Japanese yen
resulting in foreign exchange gains in 2005 as compared to foreign exchange
losses recorded during 2004; (2) lower interest payments on loans and related
items owing to lower debt balances in 2005 as compared to 2004; and (3) lower
recorded loss on derivatives in 2005 as compared to 2004.  </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">The breakdown of our financing costs for our fixed
line business for the years ended December 31, 2005 and 2004 is 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:6.25in;margin-left:5.4pt;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <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  colspan=7 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 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;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-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: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: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  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 5.4pt 0in 5.4pt'>
 <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 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>2005</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>2004</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>Amount</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>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.7pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:6.7pt'>
 <p style='page-break-after:avoid' 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;height:6.7pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">(in millions)</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">Interest on loans and related items</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">Php9,058</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php10,634</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='margin-right:.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php1,576)</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">(15)</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">Foreign exchange losses (gains) &#150;  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">(6,167)</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">2,356</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,523)</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">&nbsp;</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">(362)</p>
 </td>
 </tr>
 <tr>
 <td  valign=top 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">Hedge costs</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">1,234</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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,011</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">223</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:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">22</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">Loss on derivative transactions &#150; net</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">1,683</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">871</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">812</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <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:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">93</p>
 </td>
 </tr>
 <tr style='height:.15in'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Capitalized interest</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(419)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <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;
 height:.15in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(497)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <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;
 height:.15in'>
 <p align=right style='margin-right:.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(78)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <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;
 height:.15in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(16)</p>
 </td>
 </tr>
 <tr style='height:.15in'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Accretion on financial liabilities</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">320</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <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:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">301</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <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:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <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:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <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 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Financing charges</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">150</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">145</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='margin-right:.05in;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 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='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=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-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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php5,859</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">&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:#E0E0E0;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">Php14,821</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">&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:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php8,962)</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">&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:#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">(60)</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"><b><i>Interest Income</i></b></p>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Interest
income generated by our fixed line business amounted to Php385 million in 2005,
an increase of Php137 million, or 55%, compared to Php248 million in 2004
mainly attributable to PLDT&#146;s higher average cash balances in 2005.</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>Other Income - Net</i></b></p>

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

<p style="margin-top:0;margin-bottom:0">All other income/gains such as
rental income, gain on disposal of property, which do not fall under service
revenues are included under this classification.  In 2005, our fixed line
business segment registered a decrease in other income of Php35 million, or 47%,
to Php39 million from Php74 million in 2004.</p>

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

<p style="margin-top:0;margin-bottom:0"><b><i>Income Before Income
Tax, Cumulative Effect of Change in Accounting Policy and Minority Interest in
Net Income of Consolidated Subsidiaries</i></b></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">Our
fixed line business segment registered an income before income tax, cumulative
effect of change in accounting policy and minority interest in net income of
consolidated subsidiaries of Php5,205 million in 2005, an increase of Php3,185
million, or 158% compared to Php2,020 million in 2004, primarily resulting from
lower fixed line business-related expenses, particularly financing costs
coupled with an increase in fixed line-related revenues, partially offset by
higher depreciation and amortization.  </p>

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

<p style='margin:0in;margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Provision for Income Tax</i></h3>

<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">Provision
for income tax amounted to Php544 million in 2005 as compared to Php800 million
in 2004 due to taxable losses of PLDT owing to higher realized foreign exchange
gains in 2005 and the effect of tax rate adjustment.</p>

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

<p style='margin:0in;margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Net Income </i></h3>

<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">In 2005, our fixed line business
segment registered a net income of Php4,660 million, an increase of Php3,419
million, or 276%, compared to Php1,241 million in 2004.  The increase was
primarily due to a slight increase in fixed line operating revenues and
significantly lower financing costs, partially offset by higher fixed line
operating expenses particularly increased depreciation and amortization.  </p>

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

<p style='margin:0in;margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">Information and Communications Technology</h3>

<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' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><b>Operating Revenues </b></h5>

<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' style="margin-top:0;margin-bottom:0">Our information and communications technology business
is conducted by ePLDT, a wholly-owned subsidiary of PLDT.  </p>

<p style='margin-left:0in;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
2005, our information and communications technology business generated operating
revenues of Php3,305 million, an increase of Php904 million, or 38%, from Php2,401
million in 2004, primarily due to the growth in our call center business.  The
revenues of our information and communications technology business accounted
for 3% and 2% of our total operating revenues in 2005 and 2004, respectively.
ePLDT&#146;s call center business contributed revenues of Php1,944 million, Internet
and gaming contributed revenues of Php556 million and <i>Vitro&#153;</i> contributed
revenues of Php376 million, representing 66%, 19% and 13%, respectively, of the
total service revenues from our information and communications technology
business in 2005, compared to 62%, 27% and 8%, respectively, in 2004.  Going
forward, we expect revenues from our call center and Internet and gaming
businesses to continue to contribute significantly to our information and
communications technology revenues with the growing demand for call center
services.</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 summarizes our total operating
revenues from our information and communications technology business for the
years ended December 31, 2005 and 2004 by service segment:</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
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 <p align=center style='text-align:center;page-break-after:
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 </td>
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 <td  colspan=3 valign=top style=' border-top:solid windowtext 1.0pt;
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 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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='height:9.35pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
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 </td>
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 height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
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 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
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 </td>
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 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
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 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
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 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
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 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
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 </td>
 <td  valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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='height:9.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Service Revenues</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p style='text-indent:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Call center</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1,944</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">59</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1,283</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php661</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p style='text-indent:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Internet and gaming business</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">556</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">569</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(13)</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p style='text-indent:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Vitro&#153;</i> data
 center</p>
 </td>
 <td  valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">376</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">173</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <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=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">203</p>
 </td>
 <td  valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">117</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p style='text-indent:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">55</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <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=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,953</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">89</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,080</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">873</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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='height:9.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Non-service Revenues</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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:9.35pt'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p style='text-indent:8.1pt' style="margin-top:0;margin-bottom:0">Point-of-product
 sales</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">352</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">11</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">321</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">31</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 </tr>
 <tr style='height:9.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">Total ICT Operating Revenues</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php3,305</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php2,401</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <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 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php904</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.35pt'>
 <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 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">38</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='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Service 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">Service revenues generated by our information and
communications technology business amounted to Php2,953 million in 2005, an
increase of Php873 million, or 42%, from Php2,080 million in 2004.  This was
primarily a result of the continued growth of our call center and Internet and
gaming 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"><i>Call</i><i> Center</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">Call center 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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
inbound calls for customer care,
product inquiries, sales and technical support based on active minutes;</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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
outbound calls for sales and
collections based on active minutes; and </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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
service income for e-mail
handling, web chat, web co-browsing, data entry and business process
outsourcing based on transaction volume.</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">Revenues related to our call center business in 2005
increased by Php661 million, or 52%, to <br>
Php1,944 million from Php1,283 million in 2004, primarily due to the combined
effects of the following: (1) Vocativ&#146;s upward price adjustment for voice and
VoIP, and an increase in programs being handled; (2) an upward price adjustment
by Parlance for its inbound and outbound projects, coupled with an increase in
the number of registered minutes for inbound projects and hours for outbound
projects; and (3) commencement of Ventus operations in Iloilo in March 2005.</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">Call
center revenues accounted for 66% and 62% of our total information and
communications technology service revenues in 2005 and 2004, respectively.</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>Internet and gaming</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">Internet and gaming service revenues
consist of: </p>

<p style='margin-left:.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;
revenues derived from actual usage
of internet access network by prepaid subscribers and any unused peso value of
expired prepaid cards or electronic internet time loads, net of discounts given
to dealers; </p>

<p style='margin-left:.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;
monthly service fees from postpaid
corporate and consumer subscribers, including (1) charges for internet usage in
excess of allocated free plan internet hours; (2) one-time installation and
activation fees; and (3) fees for value added services such as additional
mailbox accounts;</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;
monthly service fees on value
added services, including e-mail and web hosting services;</p>

<p style='margin-left:.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;
one-time fees generated from
reselling internet-related solutions such as security solutions and domain registration;
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;
share in revenues of text, voice
and internet messages for cellular, fixed line and internet-based content and
applications.</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">Revenues from our Internet and gaming business in 2005
decreased by Php13 million, or 2%, to Php556 million from Php569 million in
2004, primarily due to a decrease in Infocom&#146;s revenues in 2005, which was
partially offset by the consolidation of Digital Paradise in June 2004.  Our
Internet and gaming business revenues accounted for 19% and 27% of service
revenues from information and communications technology business in 2005 and
2004, 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"><i>Vitro&#153; </i>data
center</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">ePLDT
operates an Internet data center under the brand name <i>Vitro</i>&#228;.  Granted pioneer status as an Internet data center by the BOI, <i>Vitro</i>&#228; provides co-location services, 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 security services such as
firewall and managed firewall.</p>

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

<p style='margin-left:.5in;text-indent:0in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>Vitro&#153;</i> revenues consist of:</p>

<p style='margin-left:0in;text-indent:0in;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;
monthly service fees derived from
co-location services, server hosting, hardware and software maintenance
services, website development and maintenance services, web hosting, data
recovery security services and other value added services;</p>

<p style='margin-left:.5in;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;
installation charges and other
one-time fees associated with the set-up; and </p>

<p style='margin-left:.5in;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;
monthly service fees or one-time
fees generated from professional services of Vitro&#146;s certified professionals.</p>

<p style='margin-left:.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">In
2005, <i>Vitro</i>&#228; contributed revenues of Php376 million, an increase
of Php203 million, or 117%, from Php173 million in 2004, primarily due to an
increase in co-location revenues, server hosting and other services.  <i>Vitro</i>&#228; revenues accounted for 13% and 8% of service revenues from our
information and communications technology business in 2005 and 2004,
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"><i>Others</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">Other revenues consist of:</p>

<p style='margin-left:.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;
fees generated for issuance of
digital certificates; and </p>

<p style='margin-left:.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;
revenues derived from IT
helpdesk/contact center solutions and terminals for credit, debit and credit
card transactions.</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">Revenues
from other businesses related to our information and communications technology
segment in 2005 increased to Php77 million from Php55 million in 2004 largely
due to IT helpdesk/contact center services rendered coupled with an increase in
the number of digital certificates sold.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Please
refer to <i>Note 8 &#150; Investments</i> to the accompanying consolidated financial
statements in Item 18 for further discussion on ePLDT&#146;s other information and
communications technology services.</p>

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

<p style="margin-top:0;margin-bottom:0"><i>Non-service 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">Non-service
revenues consist of sales generated from reselling certain Microsoft licenses,
server solutions, networking products, storage products and data security
products.  In 2005, non-service revenues generated by our information and
communications technology business increased by Php31 million, or 10%, to Php352
million compared to Php321 million in 2004, primarily due to higher revenues
from sales of networking equipment and Microsoft licenses.</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 Expenses</i></b></p>

<p 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">Expenses associated with our information
and communications technology business totaled Php3,253 million in 2005, an
increase of Php218 million, or 7%, from Php3,035 million in 2004, primarily due
to an increase in cash expenses, particularly compensation and benefits, partly
offset by an impairment provision recognized in 2004.  As a percentage of our
information and communications technology revenues, expenses related to our
information and communications technology business were at 98% and 126% for
2005 and 2004, respectively.  </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 the breakdown of our total
information and communications technology-related expenses for the years ended December 31, 2005 and 2004, respectively, 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:96.86%;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' 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   colspan=2 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   colspan=2 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>2005</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   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' 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' 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>2004</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: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 style='page-break-inside:avoid;height:.15in'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:.15in'>
 <p style='margin-left:4.5pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=bottom style=' padding:0in 0in 0in 0in;
 height:.15in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:.15in'>
 <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;
 height:.15in'>
 <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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Information and communications technology services:</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   colspan=2 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: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=center style='margin-right:2.9pt;text-align:center' 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: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 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:4.3pt;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: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:6.5pt;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=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>
 </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">Compensation and benefits(1)</p>
 </td>
 <td   valign=bottom 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">Php1,352</p>
 </td>
 <td   colspan=2 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">42</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   colspan=2 valign=bottom 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">Php900</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">30</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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">Php452</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=bottom 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">50</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">421</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' 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=center style='margin-right:2.9pt;text-align:center' 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">291</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:5.75pt;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='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:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">130</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=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">45</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 and amortization</p>
 </td>
 <td   valign=bottom 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">415</p>
 </td>
 <td   colspan=2 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">13</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   colspan=2 valign=bottom 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">339</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">11</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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">76</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=bottom 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">22</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">Rent</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">362</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' 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">11</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:4.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">366</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' 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: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;
 height:4.95pt'>
 <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;height:4.95pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(4)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:4.95pt'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <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'>
 <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">Repairs and maintenance</p>
 </td>
 <td   valign=bottom 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">283</p>
 </td>
 <td   colspan=2 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">9</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   colspan=2 valign=bottom 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">316</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">11</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=bottom style=' 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">(33)</p>
 </td>
 <td   valign=top style=' 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">&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">(10)</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">Communication, training and travel</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">98</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' 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">3</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   colspan=2 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">70</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: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'>
 <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:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">28</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=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">40</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 contracted services</p>
 </td>
 <td   valign=bottom 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">82</p>
 </td>
 <td   colspan=2 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2</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   colspan=2 valign=bottom 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">67</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:5.75pt;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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">15</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=bottom 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">22</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">54</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' 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">2</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   colspan=2 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">&#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' 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">&#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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">54</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=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">100</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">36</p>
 </td>
 <td   colspan=2 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:5.75pt;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=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom 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">21</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:5.75pt;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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">15</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=bottom 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">71</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">Amortization of intangibles</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">15</p>
 </td>
 <td   colspan=2 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">1</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:5.75pt;text-align:center' 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:5.75pt;text-align:right' 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: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">&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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#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>
 </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:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Insurance and security services</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 <td   colspan=2 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' 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:2.9pt;text-align:center' 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'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">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: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 0in 0in 0in 0in !msorm'>
 <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:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <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 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <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 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;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">Asset impairment </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">11</p>
 </td>
 <td   colspan=2 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">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:5.75pt;text-align:center' 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">617</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">20</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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(606)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(98)</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">Provision for inventory obslescence</p>
 </td>
 <td   valign=bottom 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">&#150;</p>
 </td>
 <td   colspan=2 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:5.75pt;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=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom 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">3</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:5.75pt;text-align:right' 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' 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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(3)</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=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">(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=' 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">110</p>
 </td>
 <td   colspan=2 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">&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">3</p>
 </td>
 <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">&nbsp;</p>
 </td>
 <td   colspan=2 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">38</p>
 </td>
 <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">&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">1</p>
 </td>
 <td   valign=top 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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">72</p>
 </td>
 <td   valign=top 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">&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">189</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.5pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php3,253</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:3.5pt'>
 <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:#E0E0E0;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   colspan=2 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 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php3,035</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:3.5pt'>
 <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:#E0E0E0;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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php218</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">7</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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other;
border:none' style="margin-top:0;margin-bottom:0">____________</p>

<p style='text-indent:.5in;line-height:3.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>(1)   Includes salaries and
benefits, incentive plan, pension and MRP costs.</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">Compensation
and benefits increased by Php452 million, or 50%, to Php1,352 million, mainly
due to the expansion of our call center and Internet and gaming businesses,
which resulted in an increase in headcount coupled with an increase in
salaries, bonuses and various incentives of employees.</p>

<p style='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 Php130 million, or 45%, to Php421 million
mainly as a result of the commercial release of <i>Khan Online</i> in February
2005 following the commencement of netGames&#146; commercial operations.
Furthermore, Vitro&#146;s increase in sales of software products in 2005 as compared
to 2004 resulted in higher selling and marketing expenses.  </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">Depreciation and amortization charges increased by
Php76 million, or 22%, to Php415 million, primarily due to an increase in the
depreciable asset base in relation to the expansion of our call center and
Internet and gaming businesses.</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">Rent expenses decreased by Php4 million, or 1%, to
Php362 million, primarily due to a decline in Vitro&#146;s lease of hosting
equipment for use in its Bureau of Internal Revenue project and the expansion
of our call center and Internet and gaming businesses.   </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">Repairs and maintenance expenses decreased by Php33
million, or 10%, to Php283 million, primarily due to Vitro&#146;s lower hardware
maintenance costs related to its IBM and CISCO equipments partially offset by
higher hosting-related costs incurred in 2005 as compared to 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">Communication,
training and travel expenses increased by Php28 million, or 40%, to Php98
million due to the increased cost of bandwidth and information system charges,
coupled by the increase in telecommunications costs incurred by our call center
business for its outbound calls.  Furthermore, CSR trainings for our call
centers during 2005 contributed higher foreign travel and training costs
compared to 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">Professional
and other contracted services increased by Php15 million, or 22%, to Php82
million, primarily due to an increase in consultancy, legal and audit fees in
2005.</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">Provision  for doubtful accounts amounted to Php54
million in 2005 primarily due to specifically identified doubtful accounts
pertaining to Infocom as of the end of 2005. No provision was provided for in
2004.</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">Taxes
and licenses increased by Php15 million, or 71%, to Php36 million, mainly on
account of documentary stamp taxes paid by ePLDT and Ventus in their issuance
of additional capital stock in 2005 as compared to 2004.</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">Amortization of intangibles amounted to Php15 million
in 2005 due to impairment of goodwill of ePLDT&#146;s investment in <i>Netopia</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">Insurance and security services increased by Php7
million, or 100%, to Php14 million primarily due to higher premium costs and an
increase in the assets insured in 2005 as compared to 2004.</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">Asset impairment amounted to Php11 million, a decrease
of Php606 million, or 98%, primarily due to the recognition of an impairment
provision in relation to an investee company in 2004. </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">Provision
for inventory obsolescence amounted to Php3 million in 2004 mainly pertaining
to maintenance-related inventory items of Infocom.</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">Other operating expenses increased by Php72 million,
or 189%, to Php110 million mainly due to recognition of royalty fees to <i>Khan
Online</i> in 2005 and an increase in other business-related costs.</p>

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

<p style='margin-left:0in;text-indent:0in' style="margin-top:0;margin-bottom:0"><b><i>Financing Costs</i></b></p>

<p style='margin-left:0in;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">Financing costs increased by Php15 million, or 38%, to
Php54 million, primarily due to higher foreign exchange losses from
dollar-denominated receivables in 2005 as compared to 2004.</p>

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

<p align=left style='text-align:left' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Provision
for Income Tax </i></h6>

<p align=left style='text-align:left;text-indent:.5in' style="margin-top:0;margin-bottom:0">Provision for income tax amounted to Php20 million
in 2005, a decrease of Php39 million, or 66%, as compared to Php59 million in
2004, primarily due to lower reversal of Infocom&#146;s recorded deferred income tax
asset in 2005 as compared to 2004.</p>

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

<p align=left style='text-align:left' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Net
Income (Loss</i><i>)</i></h6>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In
2005, our information and communications technology business segment registered
a net income of Php113 million compared to a net loss of Php699 million posted
in 2004 mainly on account of the higher net income contribution of our call
center business and impairment provision recognized in 2004, partially offset
by Infocom&#146;s operating loss in 2005 and Digital Paradise&#146;s high operating costs
due to its ongoing expansion.</p>

<p style='margin-left:0in;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"><b>2004 Compared to 2003</b></p>

<p style='margin-left:0in;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"><b>On a Consolidated Basis</b></p>

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

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Consolidated Operating Revenues </i></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">Largely driven by the continued strong growth of our wireless
business, particularly Smart&#146;s cellular business, our consolidated operating
revenues for 2004 increased by Php9,973 million, or 9%, to Php121,173 million from Php111,200
million in 2003.  The revenue contribution of our wireless business accounted
for 62% of our consolidated operating revenues for 2004, compared to 59% in
2003.  </p>

<p 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">The following table shows the breakdown of our
consolidated operating revenues for the years ended December 31, 2004 and 2003 by business segment:</p>

<p style='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:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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;
 height:9.35pt'>
 <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:9.35pt'>
 <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;height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Change</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <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;height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <p align=center style='text-align:center;text-indent:1.55pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right' style="margin-top:0;margin-bottom:0">Php74,764</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">62</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php65,183</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">59</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:1.55pt' style="margin-top:0;margin-bottom:0">Php9,581</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <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:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right' style="margin-top:0;margin-bottom:0">48,546</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">40</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">46,820</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">42</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:1.55pt' style="margin-top:0;margin-bottom:0">1,726</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:1.55pt' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">Information and
 communications technology </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right' style="margin-top:0;margin-bottom:0">2,401</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,783</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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;
 height:9.35pt'>
 <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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:1.55pt' style="margin-top:0;margin-bottom:0">618</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:1.55pt' style="margin-top:0;margin-bottom:0">35</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">Inter-segment revenues</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.35pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(4,538)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='margin-right:2.9pt' 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:9.35pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(4)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2,586)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p style='margin-right:2.9pt' 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:9.35pt'>
 <p align=right style='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:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,952)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">75</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#CCCCCC;padding:
 0in 0in 0in 0in;height:9.35pt'>
 <p style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#CCCCCC;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:6.7pt;text-align:right' style="margin-top:0;margin-bottom:0">Php121,173</p>
 </td>
 <td   valign=top style=' background:#CCCCCC;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:#CCCCCC;padding:0in 0in 0in 0in;height:9.35pt'>
 <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:#CCCCCC;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:#CCCCCC;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php111,200</p>
 </td>
 <td   valign=top style=' background:#CCCCCC;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:#CCCCCC;padding:0in 0in 0in 0in;height:9.35pt'>
 <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:#CCCCCC;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:#CCCCCC;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php9,973</p>
 </td>
 <td   valign=top style=' background:#CCCCCC;padding:0in 0in 0in 0in;
 height:9.35pt'>
 <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:#CCCCCC;padding:0in 0in 0in 0in;height:9.35pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">9</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="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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Our
consolidated operating expenses in 2004 decreased by Php5,187 million, or 7%,
to Php72,634 million from Php77,821 million in 2003.  The decrease was primarily
due to lower operating expenses associated with our wireless and fixed line
businesses, partially offset by an increase in operating expenses associated
with our information and communications technology business.  As a percentage
of our consolidated operating revenues, consolidated operating expenses
decreased to 60% in 2004 from 70% in 2003. </p>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table shows the breakdown of our
consolidated operating expenses for the years ended December 31, 2004 and 2003 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:100.14%;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=16 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;
 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   colspan=2 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 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   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>Increase/(Decrease) </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">&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' style="margin-top:0;margin-bottom:0"><b>2004</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=2 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>
 <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>2003</b></p>
 </td>
 <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>%</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=2 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   colspan=2 valign=top style=' border:none;border-top:
 solid windowtext 1.0pt;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>%</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-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=16 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">(in millions)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:4.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:4.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:4.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:4.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:4.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 height:4.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:4.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:4.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:4.0pt'>
 <p align=right style='text-align:right;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:4.0pt'>
 <p align=right style='text-align:right;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:4.0pt'>
 <p align=right style='text-align:right;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:4.0pt'>
 <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;
 height:4.0pt'>
 <p align=right style='text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;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:#E0E0E0;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.1in;text-align:right' style="margin-top:0;margin-bottom:0">Php41,598</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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=' background:#E0E0E0;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">57</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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=' background:#E0E0E0;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">Php46,264</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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=' background:#E0E0E0;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">59</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-top:0in;margin-right:4.1pt;
 margin-bottom:0in;margin-left:2.9pt;margin-bottom:.0001pt;text-align:right;
 text-indent:-2.7pt' style="margin-top:0;margin-bottom:0">(Php4,666)</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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=3 valign=top style=' background:#E0E0E0;
 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">(10)</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">Fixed line</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.1in;text-align:right' style="margin-top:0;margin-bottom:0">32,027</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 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;
 height:1.0pt'>
 <p align=right style='margin-right:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0">44</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;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;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">32,303</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 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;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">42</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-top:0in;margin-right:4.1pt;
 margin-bottom:0in;margin-left:5.75pt;margin-bottom:.0001pt;text-align:right;
 text-indent:-2.7pt' style="margin-top:0;margin-bottom:0">(276)</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:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 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">(1)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">Information and
 communications technology </p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.1in;text-align:right' style="margin-top:0;margin-bottom:0">3,035</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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=' background:#E0E0E0;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">4</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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=' background:#E0E0E0;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">2,272</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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=' background:#E0E0E0;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">3</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-top:0in;margin-right:6.5pt;
 margin-bottom:0in;margin-left:2.9pt;margin-bottom:.0001pt;text-align:right;
 text-indent:-2.9pt' style="margin-top:0;margin-bottom:0">763</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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=3 valign=top style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-top:0in;margin-right:5.75pt;
 margin-bottom:0in;margin-left:2.9pt;margin-bottom:.0001pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">34</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">Inter-segment expenses</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(4,026)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 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: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">(5)</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' 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">(3,018)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 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: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">(4)</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">&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-top:0in;margin-right:4.1pt;
 margin-bottom:0in;margin-left:2.7pt;margin-bottom:.0001pt;text-align:right;
 text-indent:-2.7pt' style="margin-top:0;margin-bottom:0">(1,008)</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' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 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-top:0in;margin-right:5.75pt;
 margin-bottom:0in;margin-left:2.9pt;margin-bottom:.0001pt;text-align:right;
 text-indent:1.45pt' 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:#E0E0E0;padding:
 0in 0in 0in 0in;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:#E0E0E0;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:.1in;text-align:right' style="margin-top:0;margin-bottom:0">Php72,634</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 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:#E0E0E0;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">100</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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:#E0E0E0;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">Php77,821</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-top:0in;margin-right:4.1pt;
 margin-bottom:0in;margin-left:2.9pt;margin-bottom:.0001pt;text-align:right;
 text-indent:-2.7pt' style="margin-top:0;margin-bottom:0">(Php5,187)</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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=3 valign=top style=' border:none;
 border-bottom:double windowtext 2.25pt;background:#E0E0E0;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">(7)</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>
 <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"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0"><b><i>Consolidated Operating
Income</i></b></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">Our
consolidated operating income in 2004 was Php48,539 million, an increase of Php15,160
million, or 45%, compared to Php33,379 million in 2003 as a result of an
increase in our consolidated operating revenues, complemented by a decrease in
our consolidated operating expenses.  </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>Consolidated Financing Costs</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">Financing
costs on a consolidated basis decreased by Php7,686 million, or 31%, to
Php17,097 million primarily due to lower foreign exchange losses pertaining to
the foreign exchange revaluation of the carrying values of financial
liabilities because the level of peso depreciation was lower in 2004 as
compared to 2003 and also because of lower foreign denominated debt balances in
2004 compared to 2003 and lower interest expense and related items owing to
lower debt balances in 2004 compared with 2003.  </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>Consolidated Interest Income</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">Interest income on a consolidated basis increased by
Php429 million, or 84%, to Php942 million in 2004 from Php513 million in 2003
mainly attributable to higher average cash balances.</p>

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

<p style="margin-top:0;margin-bottom:0"><b><i>Consolidated Other
Income - Net</i></b></p>

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

<p style='text-indent:.5in;line-height:normal' style="margin-top:0;margin-bottom:0">Other income on a
consolidated basis totaled Php2,530 million in 2004, an increase of Php1,731
million, or 217%, compared to Php799 million in 2003.  The increase was mainly
due to a gain on a debt exchange restructuring transaction conducted by Smart
in 2004 pertaining to the wireless business. There was no similar gain of the
same nature in 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"><b><i>Consolidated I</i></b><b><i>ncome
Before Income Tax, Cumulative Effect of Change in Accounting Policy and
Minority Interest in Net Loss (Income) of Consolidated Subsidiaries </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 income before income tax, cumulative
effect of change in accounting policy and minority interest in net loss
(income) of consolidated subsidiaries in 2004 was Php34,840 million, an
increase of Php25,020 million, or 255%, from Php9,820 million in 2003.</p>

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

<p style="margin-top:0;margin-bottom:0"><b><i>Provision for (Benefit
from) Income Tax</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">Provision for income tax amounted
to Php6,826 million in 2004 compared to a benefit from income tax of Php1,400
million in 2003 due to a tax loss position, as non-tax deductible charges were
higher in 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">In
2004 and 2003, our effective corporate tax rate on a consolidated basis was 20%
and 14%, respectively.  Our effective corporate tax rate was lower than the 32%
statutory corporate tax rate due to the following:  our income was already
subjected to a final tax; our income was already subjected to a lower tax rate;
and our equity in net income of our subsidiaries, which had already been
subjected to tax and was therefore no longer subject to income tax.  Our
effective tax rate increased in 2004 primarily due to the expiration in May
2004 of the three-year income tax holiday granted to 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"><b><i>Consolidated Net Income (Loss)</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">As
a result, our consolidated net income in 2004 was Php28,101 million, an
increase of Php17,056 million, or 154%, compared to Php11,045 million in 2003.
The following table shows the breakdown of our consolidated net income (loss)
for the years ended December 31, 2004 and 2003 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'>
 <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=14 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;
 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' 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=2 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 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=2 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=4 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>Change </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' style="margin-top:0;margin-bottom:0"><b>2004</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=2 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>
 <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>2003</b></p>
 </td>
 <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>%</b></p>
 </td>
 <td   colspan=2 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=2 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=' border:none;border-top:solid windowtext 1.0pt;
 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 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=14 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">(in millions)</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   colspan=2 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   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 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   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 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;
 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;
 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;
 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'>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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">Php27,559</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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=' background:#E0E0E0;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">98</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.35pt;text-align:right' style="margin-top:0;margin-bottom:0">Php13,275</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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=' background:#E0E0E0;
 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">120</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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:#E0E0E0;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">Php14,284</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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">108</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">Fixed line</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">1,241</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 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;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;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;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,902)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin-right:2.9pt' 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='text-align:right' style="margin-top:0;margin-bottom:0">(17)</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:1.55pt' 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:5.75pt;text-align:right;
 text-indent:1.55pt' style="margin-top:0;margin-bottom:0">3,143</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:5.75pt;text-align:right;
 text-indent:1.55pt' style="margin-top:0;margin-bottom:0">165</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(699)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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:
 solid windowtext 1.0pt;background:#E0E0E0;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">(328)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' 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:#E0E0E0;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(3)</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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:#E0E0E0;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">(371)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;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">113</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:none;border-bottom:double windowtext 2.25pt;
 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">Php28,101</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 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;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;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;
 height:1.0pt'>
 <p align=right style='margin-right:5.35pt;text-align:right' style="margin-top:0;margin-bottom:0">Php11,045</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin-right:2.9pt' 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:#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">100</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' 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">Php17,056</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">&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;
 text-indent:1.55pt' style="margin-top:0;margin-bottom:0">154</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>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

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

<p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b>On Business Segment Basis</b></p>

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

<p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b>Wireless</b></p>

<p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.2in;
margin-bottom:.0001pt;text-indent:0in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><a
name="_Toc98226560"><i>Operating Revenues </i></a></h3>

<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">Our wireless business segment offers cellular services
as well as satellite, VSAT, and other services.</p>

<p style='margin-left:0in;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 summarizes our total
operating service and non-service revenues from our wireless business for the
years ended December 31, 2004 and 2003 by service segment:</p>

<p style='margin-left:0in;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:98.98%;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=' 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>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>2004</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>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=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">&nbsp;</p>
 </td>
 <td   colspan=11 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">(in millions)</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 style='margin-right:13.2pt;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 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;height:1.0pt'>
 <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;height:1.0pt'>
 <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;height:1.0pt'>
 <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;height:1.0pt'>
 <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;height:1.0pt'>
 <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;
 height:1.0pt'>
 <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;height:1.0pt'>
 <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;
 height:1.0pt'>
 <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;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:.1in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Service Revenues</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;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   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;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   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 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   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:.1in'>
 <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:#E0E0E0;padding:0in 0in 0in 0in;
 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   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:.1in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:13.5pt;text-indent:9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cellular </p>
 </td>
 <td   valign=bottom 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">Php66,421</p>
 </td>
 <td   valign=bottom 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">&nbsp;</p>
 </td>
 <td   valign=bottom 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">89</p>
 </td>
 <td   valign=bottom 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">&nbsp;</p>
 </td>
 <td   valign=bottom 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">Php52,750</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <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;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">81</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">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php13,671</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <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;
 height:1.0pt'>
 <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>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:13.5pt;text-indent:9.0pt;page-break-after:
 avoid' 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:#E0E0E0;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">2,232</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;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=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;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">3</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;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=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;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">1,885</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-right:2.9pt;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;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">3</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">347</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <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:#E0E0E0;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18</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;text-indent:9.0pt;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;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">68,653</p>
 </td>
 <td   valign=bottom 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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;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">92</p>
 </td>
 <td   valign=bottom 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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;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">54,635</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-right:2.9pt;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;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">84</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">&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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,018</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">&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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">26</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:4.5pt;text-indent:9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Non-service Revenues</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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=bottom style=' background:#E0E0E0;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=bottom style=' background:#E0E0E0;
 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=bottom style=' background:#E0E0E0;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=bottom style=' background:#E0E0E0;
 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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <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:#E0E0E0;
 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=' background:#E0E0E0;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=' background:#E0E0E0;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=' background:#E0E0E0;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=' background:#E0E0E0;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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:4.5pt;text-indent:.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Sale
 of cellular handsets and SIM-packs</p>
 </td>
 <td   valign=bottom 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,111</p>
 </td>
 <td   valign=bottom 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">&nbsp;</p>
 </td>
 <td   valign=bottom 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 <td   valign=bottom 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">&nbsp;</p>
 </td>
 <td   valign=bottom 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,548</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-right:2.9pt;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;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">16</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">&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:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,437)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:.7pt;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;height:1.0pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(42)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0">Total
 Wireless Operating Revenues </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;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">Php74,764</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;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=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;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=bottom style=' background:#E0E0E0;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=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;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">Php65,183</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-right:2.9pt' 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;
 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:#E0E0E0;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=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">Php9,581</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 </tr>
</table></center></div>

<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">Service
Revenues</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">Our wireless service revenues increased
by Php14,018 million, or 26%, to Php68,653 million in 2004 compared to
Php54,635 million in 2003 mainly as a result of the continued growth of Smart&#146;s
and Piltel&#146;s subscriber base.  Accordingly, as a percentage of our total
wireless operating revenues, wireless service revenues increased to 92% in 2004
from 84% in 2003. </p>

<p style='text-indent:.5in;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>Cellular Service</i></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-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Our cellular service revenues in 2004 amounted to Php66,421
million, an increase of Php13,671 million, or 26%, from Php52,750 million in
2003.  Cellular service revenues accounted for 89% and 81% of our total
wireless operating revenues in 2004 and 2003, respectively.  The increase in
cellular service revenues was primarily due to the continued growth of Smart&#146;s
and Piltel&#146;s subscriber base.  As at December 31, 2004, the combined cellular subscribers of Smart and Piltel reached 19,208,232, an increase of 6,261,035, or
48%, over their combined cellular subscriber base of 12,947,197 as at December 31, 2003.  Prepaid and postpaid net subscriber activations totaled 6,235,518 and
25,517, respectively, in 2004, or a quarterly average addition of 1,558,880
prepaid and 6,379 postpaid subscribers.</p>

<p 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">The table below shows our cellular subscribers base as
at December 31, 2004 and 2003:</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:97.12%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:justify;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='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>As at 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</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;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>2004</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>2003</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=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:2.9pt;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:2.9pt;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:2.9pt;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:2.9pt;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:2.9pt;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:2.9pt;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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style=';text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cellular subscriber base </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">19,208,232</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">12,947,197</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">6,261,035</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">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' style="margin-top:0;margin-bottom:0">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">18,933,738</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">12,698,220</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">6,235,518</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">49</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:
 9.0pt' style="margin-top:0;margin-bottom:0">Smart </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">14,321,288</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' 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">9,831,135</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">4,490,153</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">46</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:
 9.0pt' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,612,450</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">2,867,085</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">1,745,365</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">61</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' style="margin-top:0;margin-bottom:0">Postpaid</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">274,494</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">248,977</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">25,517</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">10</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Of our 19,208,232 subscribers as at December 31, 2004, prepaid subscribers accounted for approximately 99% while postpaid
subscribers accounted for the remaining 1%.  Our cellular prepaid subscriber
base grew by 49% to 18,933,738 as at December 31, 2004 from 12,698,220 as at
December 31, 2003, whereas our postpaid subscriber base increased by 10% to
274,494 as at December 31, 2004 from 248,977 as at December 31, 2003.  Smart&#146;s
prepaid and postpaid net subscriber activations totaled 4,490,153 and 25,517,
respectively, in 2004, or a quarterly average addition of 1,122,538 prepaid and
6,379 postpaid subscribers.  On the other hand, Piltel&#146;s prepaid subscribers
increased by 61% to 4,612,450 as at December 31, 2004 from 2,867,085 as at
December 31, 2003, or a quarterly average addition of 436,341 subscribers.</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 quarterly net subscriber activations (reductions)
over the eight quarters in 2004 and 2003 are as follows:</p>

<p style='line-height:8.0pt;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:418.5pt;margin-left:5.4pt;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=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>Prepaid</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>Postpaid</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>Total</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>Smart</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>Piltel</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>Smart</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;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>
 </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>2004</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=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>
 <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>
 <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">First Quarter</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,162,301</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">218,038</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,866</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;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'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,397,205</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">Second Quarter</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,207,542</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">468,772</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,691</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;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:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,684,005</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">Third Quarter</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">797,686</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">635,978</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,445</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;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'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,444,109</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">Fourth Quarter</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,322,624</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">422,577</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:12.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9,485)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:12.6pt;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:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,735,716</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  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;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'>
 <p align=right style='margin-right:.2in;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'>
 <p align=right style='margin-right:.2in;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>2003</b></p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;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:.2in;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:.2in;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">First Quarter</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">527,158</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">205,086</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">36,963</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;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'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">769,207</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">Second Quarter</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">744,251</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">241,630</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,331</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;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:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">995,212</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">Third Quarter</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">858,723</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">319,528</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,816</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;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'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,187,067</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">Fourth Quarter</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,051,965</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">327,221</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,219</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.2in;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:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,396,405</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:auto' style="margin-top:0;margin-bottom:0">Satellite, VSAT and Other Services</p>

<p style='line-height:8.0pt' 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 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.  Gross service revenues from these
services for 2004 amounted to Php2,232 million, an increase of Php347 million,
or 18%, from Php1,885 million in 2003.</p>

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

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Non-service Revenues</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">Our wireless non-service revenues decreased by Php4,437
million, or 42%, to Php6,111 million in 2004 as compared to Php10,548
million in 2003 mainly attributable to lower handset sales due to the fact that
activations in 2004 were primarily driven by more SIM-pack sales and SIM-swap
activities.  </p>

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

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:left;
text-indent:.3in;page-break-after:auto;punctuation-wrap:hanging;text-autospace:
ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Operating
Expenses</i></h6>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Operating expenses associated with our wireless
business in 2004 amounted to Php41,598 million, a decrease of Php4,666 million,
or 10%, from Php46,264 million in 2003.  A significant portion of this decrease
was mainly attributable to decreases in costs of cellular handsets and
SIM-packs sold and depreciation and amortization, partially offset by higher
rent and selling and promotions expenses.  As a percentage of our total
wireless operating revenues, operating expenses associated with our wireless
business decreased to 56% in 2004 from 71% 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">Cellular business expenses accounted for 93% while
satellite, VSAT and other business expenses accounted for 7% of our wireless
business expenses in 2004, compared to 94% and 6%, respectively, in 2003.</p>

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

<p style='margin-left:0in;text-indent:.5in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">The following table summarizes our
wireless-related expenses for the years ended December 31, 2004 and 2003 and the percentage of each expense item to the total:</p>

<p style='line-height:8.0pt;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:95.2%;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;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=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=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=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=3 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>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' 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>2004</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>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"><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>Amount</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>%</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' 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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0">Wireless
 services</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom 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=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom 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 style="margin-top:0;margin-bottom:0">&nbsp;</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 style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Costs
 of cellular handsets and SIM-packs sold</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">Php10,599</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">25</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">Php15,790</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">34</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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php5,191)</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:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(33)</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' style="margin-top:0;margin-bottom:0">Depreciation
 and amortization</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">10,082</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">24</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">12,183</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">26</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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,101)</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:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(17)</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' 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">4,261</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">10</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">3,305</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">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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">956</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">29</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' style="margin-top:0;margin-bottom:0">Rent</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">4,156</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">10</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">2,235</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">5</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1,921</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">86</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' style="margin-top:0;margin-bottom:0">Compensation
 and benefits(1)</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">3,195</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">8</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">3,682</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">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=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(487)</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:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(13)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.65pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:7.65pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Repairs
 and maintenance</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,597</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:7.65pt'>
 <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;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:7.65pt'>
 <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;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,051</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:7.65pt'>
 <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;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:7.65pt'>
 <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;height:7.65pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">546</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:7.65pt'>
 <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;
 height:7.65pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">27</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' 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' style="margin-top:0;margin-bottom:0">1,299</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">1,919</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' 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">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' 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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(620)</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:.05in;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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' 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' style="margin-top:0;margin-bottom:0">1,214</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">1,142</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=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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">72</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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:5.75pt;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' style="margin-top:0;margin-bottom:0">Insurance
 and security services</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">937</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=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">756</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">181</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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Communication,
 training and travel</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">791</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=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">619</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.7pt;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:1.45pt;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:1.45pt;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">172</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">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:13.5pt' style="margin-top:0;margin-bottom:0">Professional
 and other contracted services</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">472</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">743</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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(271)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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:2.15pt;text-align:right' 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' style="margin-top:0;margin-bottom:0">Asset
 impairment </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">430</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">1</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">288</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.7pt;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">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;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">142</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">49</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' 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">213</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">126</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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">145</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' 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">204</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">1</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">72</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">&#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' 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' 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:4.3pt;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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">183</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' style="margin-top:0;margin-bottom:0">Amortization
 of 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' style="margin-top:0;margin-bottom:0">93</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=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">766</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:1.45pt;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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(673)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(88)</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' 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:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,055</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=' 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' 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=' 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' style="margin-top:0;margin-bottom:0">626</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=' 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' 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:1.45pt;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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">429</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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">69</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.5pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:3.5pt'>
 <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 1.5pt;background:#F3F3F3;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">Php41,598</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;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 1.5pt;background:#F3F3F3;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:#F3F3F3;
 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 1.5pt;background:#F3F3F3;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">Php46,264</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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 1.5pt;background:#F3F3F3;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:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' 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;height:3.5pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php4,666)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;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 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(10)</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-left:.25in;text-indent:-.25in;line-height:
3.0pt' 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>(1)   Includes salaries and benefits, incentive plan,
pension and MRP costs.</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">Costs
of cellular handsets and SIM-packs sold decreased by Php5,191 million, or 33%,
to Php10,599 million as activations in 2004 were primarily driven more by
SIM-pack sales and SIM-swap activities compared to handset sales in 2003.</p>

<p style='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">Depreciation and amortization charges decreased by Php2,101
million, or 17%, to Php10,082 million substantially due to a decrease in the
depreciable asset base as certain of our wireless assets were fully depreciated
by the end of 2004.</p>

<p 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 Php956 million, or 29%, to Php4,261 million
due to advertising and promotions costs incurred to attract new subscriptions,
as well as to retain our existing subscriber base.  </p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Rent
expenses increased by Php1,921 million, or 86%, to Php4,156 million on account
of an increase in the number of transmission links and higher cell site and
office space rentals for the increased number of cell sites, wireless centers
and space requirements for increased personnel, primarily related to the
increase in the number of our subscribers.  As at December 31, 2004, we had 3,951 cell sites and 5,303 base stations, compared with 2,920 cell sites and 3,904
base stations as at December 31, 2003.</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">Compensation and benefits decreased by Php487 million,
or 13%, to Php3,195 million primarily due to a higher accrual in 2003 of a long-term incentive benefits of
managers and executives of Smart covering the period 2000 to 2004, partially
offset by an increase in headcount and
increased salaries, benefits and performance bonuses of Smart&#146;s employees.  Smart's
employee headcount increased by 8% to 5,239 as at December 31, 2004 from 4,870 as at 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">Repairs
and maintenance expenses increased by Php546 million, or 27%, to Php2,597
million mainly on account of higher repairs and maintenance costs, and higher
site utility expenses due to, and in line with, the continued growth in the
number of cell sites and other network facilities.  </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">Cost of satellite air time decreased by Php620
million, or 32%, to Php1,299 million due to the change in the basis of
recognizing air time cost.  In 2003, satellite air time cost was accrued at a
fixed amount per month based on the payment schedule in a standstill agreement
in consideration for unlimited air time access.  In 2004, upon the termination
of the standstill agreement, air time cost was reverted to the original
charging rate on a per minute basis.  This was agreed to be the basis of air
time cost until a new agreement is finalized.  </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">Taxes
and licenses increased by Php72 million, or 6%, to Php1,214 million mainly due
to an increase in Smart&#146;s business-related permits and licenses.  </p>

<p style='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 security services increased by Php181 million, or 24%, to Php937 million mainly due to the increase in our number of cell sites
and in the amount of network equipment insured as a result of the continued
growth and expansion of our 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">Communication,
training and travel increased by Php172 million, or 28%, to Php791 million due
to higher local training and travel costs, as well as increased delivery,
freight and hauling expenses incurred 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">Professional
and other contracted services decreased by Php271 million, or 36%, to Php472
million mainly as a result of decreased legal and consultancy fees primarily
incurred in connection with transactions conducted by  Smart in 2004, partially
offset by increased bill collection service fees in line with the growth of our
subscriber base.</p>

<p style='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 Php142 million, or 49%, to Php430 million due
to impairment losses recognized in respect of Mabuhay Satellite&#146;s investment in
an investee company amounting to Php430 million as compared to Piltel&#146;s recognition
of asset impairment amounting to Php288 million in 2003.</p>

<p style='margin-left:0in;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">Provision for inventory obsolescence increased by
Php126 million, or 145%, to Php213 million, primarily due to slow moving
handsets relating to ACeS Philippines in 2004.</p>

<p style='margin-left:0in;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">Provision for doubtful accounts increased by Php132
million, or 183%, to Php204 million in 2004 mainly due to an increase of
specifically identified uncollectible subscriber accounts of Smart.</p>

<p style='margin-left:0in;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 intangible assets decreased by Php673 million, or 88%,
to Php93 million in 2004 mainly due to the amortization of a customer list of
Php766 million in 2003.  The amortization expense of Php93 million in 2004
represents amortization of intangibles incurred in acquiring equity interests
in Smart Broadband and Wolfpac by Smart; no similar charges were incurred 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">Other operating expenses increased by Php429 million, or 69%, to Php1,055 million
due to various business and operational-related expenses such as facility usage
fees and office supplies expenses.</p>

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

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0"><b><i>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">Operating income from our wireless business amounted to Php33,166
million in 2004, an increase of Php14,247 million, or 75%, from Php18,919
million in 2003, primarily due to increased revenues, mainly from our cellular
services, complemented by lower operating expenses.  </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>Financing Costs</i></b></p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Financing costs associated with our wireless business
decreased by Php1,848 million, or 45%, to Php2,285 million in 2004, primarily
due to lower foreign exchange losses, because the level of depreciation of the
peso was higher in 2003 compared to 2004, and lower interest expense on loans
resulting from lower debt balances in 2004 as compared to 2003.  </p>

<p style='margin-left:0in;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 breakdown of our financing costs for
our wireless business for the years ended December 31, 2004 and 2003 is as follows:</p>

<p style='margin-left:0in;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:6.25in;margin-left:5.4pt;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <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  colspan=7 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 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;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-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: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: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  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 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Change</b></p>
 </td>
 </tr>
 <tr>
 <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>2004</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>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>Amount</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>%</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  colspan=7 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">(in millions)</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">Interest on loans and related items</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">Php1,082</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1,375</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">(Php293)</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">(21)</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">Accretion on financial liabilities</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">884</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>
 <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">449</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>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">435</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>
 <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">97</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">Foreign exchange losses &#150; net</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">423</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,139</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">(1,716)</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">(80)</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">Financing charges</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">1</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='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 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;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 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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(97)</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">(Gain) loss on derivative transactions &#150; net</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)</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">165</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">(172)</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">(104)</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">Capitalized interest</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 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">(98)</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=' border:none;border-bottom:solid windowtext 1.0pt;
 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">(27)</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=' border:none;border-bottom:solid windowtext 1.0pt;
 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">(71)</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>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 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">263</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">&nbsp;</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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php2,285</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=' border:none;border-bottom:double windowtext 1.5pt;
 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">Php4,133</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=' border:none;border-bottom:double windowtext 1.5pt;
 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">(Php1,848)</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=' border:none;border-bottom:double windowtext 1.5pt;
 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)</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-left:0in;text-indent:0in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Interest Income</i></b></p>

<p style='margin-left:0in;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">Interest income generated by our wireless
business amounted to Php724 million in 2004, an increase of Php356 million, or
97%, compared to Php368 million in 2003 mainly attributable to Smart&#146;s higher
average cash balances.</p>

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

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:left;
punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Other Income - Net</i></h6>

<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 generated other income -
net of Php1,930 million in 2004, an increase of Php1,843 million, from Php87
million in 2003.  This increase was primarily a result of a Php2,816 million
gain on a debt restructuring transaction conducted by Smart in 2004 pertaining
to our wireless business.  </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>Income Before Income
Tax, Cumulative Effect of Change in Accounting Policy and Minority Interest in
Net Income (Loss) of Consolidated Subsidiaries</i></b></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">Income
before income tax, cumulative effect of change in accounting policy and
minority interest in net income (loss) of consolidated subsidiaries increased
by Php18,300 million, or 121%, to Php33,463 million in 2004 compared to Php15,163
million in 2003, mainly due to a 15% increase in wireless operating revenues,
principally from our cellular business, resulting from the continued cellular
subscriber growth, as well as a decrease in our wireless business expenses of 10%
in 2004.</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="_Toc98226561"><b><i>Provision
for Income Tax</i></b></a></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">Provision for income tax increased by Php4,295
million, or 257%, to Php5,967 million in 2004 from Php1,672 million in 2003 as
Smart&#146;s income tax holiday expired in 2004.  </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">Smart's three-year income tax holiday, which expired
in May 2004, applied to the incremental income generated from its GSM network
expansion.  The income tax holiday was computed by applying the exemption rate
against the income tax derived from GSM operations.  The exemption rate was
computed by dividing the incremental GSM revenues by eligible GSM revenues
(both gross of interconnection revenues) where the incremental GSM revenues
were derived by deducting the base figure prescribed by the BOI (Smart&#146;s gross
revenue in 2000) from the total GSM revenues.  After adjusting for
non-deductible items and unrealized and realized foreign exchange losses,
Smart&#146;s net taxable income was multiplied by the statutory corporate income tax
rate of 32% and the exemption rate.  The resulting figure was the income tax
that was deducted from the income tax due on GSM revenues with the difference
being the income tax due for the period.  </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="_Toc98226562"><b><i>Net Income</i></b></a></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">Our wireless business segment recorded a net income of
Php27,559 million in 2004, an increase of Php14,284 million, or 108%, over Php13,275
million registered in 2003 due primarily to the 48% growth in our cellular
subscriber base, complemented by an 10% decrease in wireless expenses.</p>

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

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:left;
text-indent:.3in;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">Fixed Line</h6>

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

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

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

<p style='margin-left:0in;text-indent:.5in' 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.  Operating revenues generated
from our fixed line business for 2004 totaled Php48,546 million, an increase of
Php1,726 million, or 4%, from Php46,820 million in 2003.  This increase was primarily due to higher revenues
generated from data and other network services, national long distance
services, international long distance services and miscellaneous revenues,
partially offset by decreased revenues from local exchange service.  As a
percentage of our total operating revenues, fixed line revenues decreased to 39%
in 2004 from 41% in 2003, principally due to the continued growth of our
wireless business.  </p>

<p 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 summarizes total
operating revenues from our fixed line business for the years ended December 31, 2004 and 2003 by service segment:</p>

<p style='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:95.2%;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=' 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>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>2004</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>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=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='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=9 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">(in millions)</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;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Service Revenues</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">&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">&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">&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">&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">&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">&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">&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">&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">&nbsp;</p>
 </td>
 <td   valign=bottom 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">&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:13.5pt;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'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php20,606</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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">42</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: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:#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:5.75pt;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=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">(Php122)</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:2.15pt;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=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">International 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,804</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">26</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">12,767</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">27</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=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">37</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">&#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">National 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,736</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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14</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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,561</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:5.75pt;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:5.75pt;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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">175</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: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:#D9D9D9;
 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:#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">7,114</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">15</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">5,978</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">13</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=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">1,136</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">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">Miscellaneous</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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,286</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=' 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">3</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:5.75pt;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:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">786</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=' 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">2</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=bottom 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">500</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=' 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">64</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' style="margin-top:0;margin-bottom:0">Total
 Fixed Line Operating Revenues </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;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">Php48,546</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:
 double windowtext 2.25pt;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">100</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:
 double windowtext 2.25pt;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">Php46,820</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:
 double windowtext 2.25pt;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">100</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=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;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">Php1,726</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=' border:none;border-bottom:
 double windowtext 2.25pt;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</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.2in;
margin-bottom:.0001pt;text-indent:-.2in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><a name="_Toc98226563"><i>Service Revenues</i></a></h3>

<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>Local Exchange 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">The following table summarizes key measures of our
local exchange service business segment as at and for the years ended December 31, 2004 and 2003:</p>

<p style='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:91.34%;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-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>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>2004</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>2003</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>
 <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=' 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=' 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=' 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=' 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 service 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">Php20,606</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">Php20,728</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=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">(Php122)</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">(1)</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">2,152,027</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">2,185,951</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=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">(33,924)</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>
 </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">Number of fixed line 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,692</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">10,518</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=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">(826)</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">(8)</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 fixed lines in service per 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">222</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">208</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=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">14</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Revenues from our local exchange service in 2004
decreased by Php122 million, or 1%, to Php20,606 million from Php20,728 million
in 2003.  The decrease was primarily due to the (1) shift in subscriber
preference from postpaid to prepaid services, which generate lower average
revenue per subscriber, and (2) decline in installation revenues due to a
promotion 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 service revenues decreased to 42% in 2004 from 44% 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">Fixed line net
reductions in 2004 were 33,924 as compared to 2,661 in 2003.  While fixed line
additions totaled 11,532 for prepaid fixed line services, postpaid fixed lines
in service declined by 45,456 in 2004.  As at December 31, 2004, postpaid and prepaid fixed line subscribers totaled 1,783,191 and 368,836, respectively,
which accounted for approximately 83% and 17%, respectively, of total fixed
lines in service.</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 adjust our monthly local service rates
upward or downward by 1% for every Php0.10 change in the peso-to-dollar
exchange rate relative to a base rate of Php11.00 to US$1.00.  During 2004, we
implemented six upward and one downward adjustments in our monthly local
service rates compared to 11 upward and three downward adjustments in 2003.
The average peso-to-dollar rate in 2004 was Php56.044 to US$1.00, compared to
the average of Php54.215 to US$1.00 in 2003.  This change in the average
peso-to-dollar rate translated to a peso depreciation of 3%, which resulted in
an average net increase of 1.5% in our monthly local service rates in 2004. </p>

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

<p style='margin-left:0in;text-indent:.5in;line-height:
94%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table shows information about our international fixed line long
distance business for the years ended December 31, 2004 and 2003:</p>

<p style='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:94.24%;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>2004</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>2003</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=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=' 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=' 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=' 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">Total international
 long distance service 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">Php12,804</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">Php12,767</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">Php37</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:6.5pt;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='height:.1in'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:.1in'>
 <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;height:.1in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,452</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:.1in'>
 <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;height:.1in'>
 <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=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:.1in'>
 <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;height:.1in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(162)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:.1in'>
 <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;
 height:.1in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2)</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">2,352</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">2,153</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">199</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:6.5pt;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">9</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:.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=';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;text-indent:-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">2,348</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">2,286</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">62</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:6.5pt;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</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;text-indent:-13.5pt;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">2,192</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">2,128</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">64</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:6.5pt;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-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:27.0pt;margin-bottom:.0001pt;text-indent:-13.5pt;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">156</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">158</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:.7pt;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:.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;page-break-after:avoid' 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-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:27.0pt;margin-bottom:.0001pt;text-indent:-13.5pt;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">14.1:1</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">13.5:1</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=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">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:.05in;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:6.5pt;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"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our total international long distance service revenues increased
by Php37
million, to Php12,804 million in 2004 from Php12,767 million in 2003 primarily due to an increase in
outbound international long distance revenues.  The percentage contribution of
international long distance service revenues to our total fixed line operating
revenues decreased to 26% in 2004 from 27% 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">Our revenues from inbound international long distance calls in
2004 decreased by Php162 million to Php10,452
million from Php10,614 million in 2003
primarily due to the change in call mix in favor of transit calls with lower
hubbing 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">Our inbound international long distance call volumes in 2004
increased by 3% to 2,192 million minutes from 2,128 million minutes in 2003,
largely due to an increase in transit calls.</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 revenues from outbound international
long distance calls in 2004 increased by Php199 million, or 9%, to Php2,352
million from Php2,153 million in 2003.  The
increase resulted from higher conversion rates used as average billing rates
were Php55.98 and Php54.04 in 2004 and 2003, respectively, and a change in call
mix in favor of traffic utilizing least cost routes.</p>

<p style='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 declined by
1% to 156 million minutes in 2004 from 158 million minutes in 2003, 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, international text messaging and internet
telephony.</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"><b><i>&nbsp;</i></b></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 service revenues and call volumes for the years ended December
31, 2004 and 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:98.08%;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' style="margin-top:0;margin-bottom:0"><b>2004</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>2003</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=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=' 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=' 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">Total national long distance service
 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">Php6,736</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">Php6,561</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=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">Php175</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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.05pt;text-align:right' 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">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">1,853</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">2,016</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=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">(163)</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=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">(8)</p>
 </td>
 </tr>
</table></center></div>

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

<p style="margin-top:0;margin-bottom:0">Our national long
distance service revenues increased by Php175 million, or 3%, to Php6,736 million in 2004 from Php6,561 million
in 2003 as a result of increased national direct dial, or NDD, rates and more
beneficial interconnection agreements with cellular operators.  The percentage
contribution of national long distance revenues to our total fixed line service
revenues was 14% for 2004 and 2003.</p>

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

<p style="margin-top:0;margin-bottom:0">Our national long
distance call volumes, however, decreased by approximately 8% to 1,853 million
minutes in 2004 from 2,016 million minutes in 2003.  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="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></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='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
2004, our data and other network services posted revenues of Php7,114 million,
an increase of Php1,136 million, or 19%, from Php5,978 million in 2003.  The
revenue contribution of this service segment to our total fixed line service
revenues increased to 15% in 2004 from 13% in 2003.</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">Of our total revenues from data and other network services
in 2004, leased lines accounted for 56%, IP-based services accounted for 25%, packet-based
services accounted for 13% and switch-based services accounted for the
remaining 6%, compared to 62%, 17%, 15% and 6%, respectively, in 2003.  These
percentage changes indicate a continuing shift in data and other network
revenues from traditional bandwidth services to broadband/IP-based 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='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Miscellaneous service revenues are derived mostly from directory
advertising and facilities rental.  In 2004, these revenues increased by Php500 million,
or 64%, to Php1,286 million from Php786 million in 2003.  The improvement was mainly due to
an increase in co-location charges from more co-location sites coupled with an
increase in rent income on duct utilization and cable restoration.
Miscellaneous service revenues accounted for approximately 3% of our total
fixed line service revenues in 2004 and 2% in 2003.</p>

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

<p style='margin:0in;margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><a
name="_Toc98226564"><i>Operating Expenses</i></a></h3>

<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">Operating
expenses related to our fixed line business in 2004 totaled Php32,027 million,
a decrease of Php276 million, or 1%, compared to Php32,303 million in 2003.
The decrease was primarily due to compensation and benefits as a result of
PLDT&#146;s MRP and lower cost of satellite air time and asset impairment charges.
As a percentage of our total fixed line operating revenues, fixed line-related
expenses decreased to 66% in 2004, compared to 69% 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 following table shows the
breakdown of our total fixed line-related expenses for the years ended December 31, 2004 and 2003 and the percentage of each expense item to the total:</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:93.26%;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>2004</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>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=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 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">&nbsp;</p>
 </td>
 <td   colspan=9 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(in millions)</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;height:11.7pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <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;height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <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;height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:11.7pt'>
 <p 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">Depreciation and amortization</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">Php9,677</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">30</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">Php9,315</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">29</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=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">Php362</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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:#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(1)</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">7,921</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">25</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:4.3pt;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 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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">28</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=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">(1,050)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(12)</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">3,751</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">12</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">3,950</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">12</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=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">(199)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(5)</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">Repairs and 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">3,211</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">10</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">3,081</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:4.3pt;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='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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">130</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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">Rent</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">1,746</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">5</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1,909</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">6</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=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">(163)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(9)</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">1,159</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">4</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1,055</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:4.3pt;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=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">104</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">10</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">Professional and other contracted services</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">1,060</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">471</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:4.3pt;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: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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">589</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">125</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:1.45pt;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Taxes and licenses</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">820</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">991</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:4.3pt;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=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">(171)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(17)</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 security services</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">700</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=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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">762</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:4.3pt;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=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">(62)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;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">Communication, training and travel</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">449</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">905</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:4.3pt;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=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">(456)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(50)</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 </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">365</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">1</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</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:4.3pt;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: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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">365</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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">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">361</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">152</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:4.3pt;text-align:right' 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' 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">209</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">138</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">Other operating expenses</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">807</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=' 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' 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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">741</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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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=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">66</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.5pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 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 1.5pt;background:#F3F3F3;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">Php32,027</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;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 1.5pt;background:#F3F3F3;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:#F3F3F3;
 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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">Php32,303</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;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 1.5pt;background:#F3F3F3;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">(Php276)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <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=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(1)</p>
 </td>
 </tr>
</table></center></div>

<p style='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other;
border:none' style="margin-top:0;margin-bottom:0">____________</p>

<p style='margin-left:.25in;text-indent:-.25in;line-height:
3.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:135.0pt;text-indent:-130.5pt' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp; </i><i>Includes salaries and benefits, incentive plan, pension
and MRP costs.</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">Depreciation and amortization charges increased by Php362 million,
or 4%, to Php9,677 million mainly due to higher depreciation of our
regular asset base 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 decreased by Php1,050 million, or 12%, to Php7,921 million mainly
due to a 7% reduction in headcount due to PLDT&#146;s MRP in 2003, when MRP cost of
Php1,560 million was recognized consequently; in 2004, MRP cost amounted to
Php553 million.  This decreasing effect was partially offset by collective
bargaining agreement-related increases in salaries and benefits of PLDT
employees.  </p>

<p style='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 Php199 million, or 5%, to Php3,751 million
primarily on account of lower provisions by PLDT for anticipated uncollectible
accounts from various specifically identified domestic telecommunications
carriers.  PLDT makes provisions for anticipated uncollectible accounts based
on the aging profile of its accounts receivables.  PLDT&#146;s provision for
doubtful accounts in 2004 and 2003 was equivalent to 8% of its service
revenues.  </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">Repairs and maintenance expenses increased by Php130
million, or 4%, to Php3,211 million primarily owing to the expiration of warranties
for certain plant facilities and higher maintenance costs of computer and
peripherals in relation to charges for software support agreements for certain
systems in 2004 as compared in 2003, partially offset by lower maintenance
costs of the domestic fiber optic network due to more remedial works done in
2003 than in 2004.</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 decreased by Php163 million, or 9%, to
Php1,746 million due to a decrease in international leased circuits and rental
for bundled sales/value added service units expense.</p>

<p style='margin-left:0in;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">Selling and promotion expenses increased by Php104
million, or 10%, to Php1,159 million mainly as a result of an increase in
PLDT&#146;s promotional activities in relation to various products and services,
partially offset by reduced corporate public relations expenses.</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">Professional and other contracted services increased
by Php589 million, or 125%, to Php1,060 million as a result of higher legal
fees in 2004 for various services, partially offset by a decrease in number of
consultants in line with PLDT&#146;s cost management efforts, coupled with a
decrease in collection agency fees on account of lower final accounts subject
for collection.</p>

<p 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 Php171 million, or 17%, to Php820 million mainly on
account of lower business-related taxes paid in 2004 as compared to 2003.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Insurance
and security services decreased by Php62 million, or 8%, to Php700 million
primarily due to lower premiums on property all-risk, industrial all-risk and
industrial fire insurance and lower number of contracted security guards.</p>

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

<p style="margin-top:0;margin-bottom:0">Communication, training and
travel decreased by Php456 million, or 50%, to Php449 million due to lower
mailing, courier and delivery services, as well as a decrease in local travel
and training in 2004 as compared to 2003.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Asset
impairment amounted to Php365 million in 2004 due to impairment of Piltel&#146;s
E.O. 109 facilities amounting to Php1,438 million. </p>

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

<p style="margin-top:0;margin-bottom:0">Provision for inventory
obsolescence increased by Php209 million, or 138%, to Php361 primarily on
account of higher inventory obsolescence owing to slow-moving items determined
in 2004 as compared to 2003.</p>

<p 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 Php66 million, or 9%, to Php807 million due to
higher contracted costs for technical and helpdesk resources and related
computer and maintenance and in-house systems development, partially offset by
lower office supplies consumption and printing costs resulting from PLDT&#146;s
continuing cost-containing activities.</p>

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

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

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

<p style="margin-top:0;margin-bottom:0">Operating income from our fixed
line service amounted to Php16,519 million in 2004, an increase of Php2,002
million, or 14%, from Php14,517 million in 2003 due to increased revenues
primarily relating to our data and other network services as well as lower
operating expenses.  </p>

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

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0"><b><i>Financing
Costs</i></b></p>

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

<p style="margin-top:0;margin-bottom:0">Financing costs associated with
our fixed line business decreased by Php5,769 million, or 28%, to Php14,821
million primarily due to lower interest expense and related items owing to
lower debt balances in 2004 compared with 2003 and lower foreign exchange
losses pertaining to: (1) the foreign exchange revaluation of the carrying
values of financial liabilities because the level of peso depreciation was
higher in 2003 as compared to 2004 and (2) designation and documentation of
certain hedged items as hedged instruments to qualify for hedge accounting from
July 2004 onwards.  </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
breakdown of our financing costs for our fixed line business for the years
ended December 31, 2004 and 2003 is 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:6.25in;margin-left:5.4pt;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <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  colspan=7 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 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;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-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: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: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  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 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Change</b></p>
 </td>
 </tr>
 <tr>
 <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>2004</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>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>Amount</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>%</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  colspan=7 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">(in millions)</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">Interest on loans and related items</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">Php10,634</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php10,894</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">(Php260)</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">(2)</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">Foreign exchange losses &#150; net</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">2,356</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">7,525</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">&nbsp;</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">(5,169)</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">&nbsp;</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">(69)</p>
 </td>
 </tr>
 <tr>
 <td  valign=top 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">Hedge costs</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">1,011</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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,054</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">(43)</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:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4)</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">Loss on derivative transactions &#150; net</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">871</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">1,466</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">&nbsp;</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">(595)</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">&nbsp;</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">(41)</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">Accretion on financial liabilities</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">301</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">280</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='margin-right:2.15pt;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 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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8</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">Financing charges</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">145</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;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">231</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">&nbsp;</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">(86)</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">&nbsp;</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">(37)</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">Capitalized interest</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">(497)</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">(860)</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='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">363</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">(42)</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=' 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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">Php14,821</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">&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:#E0E0E0;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">Php20,590</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">&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:#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">(Php5,769)</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">&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:#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">(28)</p>
 </td>
 </tr>
</table></center></div>

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

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

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

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Interest
income generated by our fixed line business amounted to Php248 million in 2004,
an increase of Php110 million, or 80%, compared to Php138 million in 2003
mainly attributable to PLDT&#146;s higher average cash balances.</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>Other Income - Net</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">All
other income/gains such as rental income, gain on disposal of property, which
do not fall under service revenues are included under this classification.  In
2004, our fixed line business segment registered a decrease in other income of
Php950 million, or 93%, to Php74 million in 2004 from Php1,024 million in 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>Income (Loss) Before Income Tax, Cumulative Effect of Change in
Accounting Policy 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"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our fixed line business segment registered an income
before income tax, cumulative effect of change in accounting policy and
minority interest in net income of consolidated subsidiaries of Php2,020
million in 2004 compared to a loss of Php4,911 million in 2003, primarily
resulting from a substantial decrease in fixed line business-related expenses,
particularly financing costs and compensation and benefits.  </p>

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

<p style='margin:0in;margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><a
name="_Toc98226565"><i>Provision for (Benefit
from) Income Tax</i></a></h3>

<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">Provision
for income tax amounted to Php800 million in 2004 as compared to benefit from
income tax of Php3,008 million in 2003 due to a tax loss position in 2003 as
non-tax deductible charges were higher in 2003.</p>

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

<p style='margin:0in;margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Net Income (Loss) </i></h3>

<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">In 2004, our fixed line business
segment registered a net income of Php1,241 million, compared to a net loss of Php1,902
million in 2003.  The change was primarily due to an increase in fixed line
operating revenues as well as a decrease in fixed line-related expenses,
particularly compensation and benefits, communication, training and travel and
lower financing costs.  </p>

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

<p style='margin:0in;margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><a
name="_Toc98226567">Information and
Communications Technology</a></h3>

<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' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><b>Operating Revenues </b></h5>

<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">In
2004, our information and communications technology business generated
operating revenues of Php2,401 million, an increase of Php618 million, or 35%,
from Php1,783 million in 2003.  These revenues accounted for 2% of our total
operating revenues in 2004 and 2003.  ePLDT&#146;s call center business contributed
revenues of Php1,283 million, Internet and gaming contributed revenues of
Php569 million, <i>Vitro&#153;</i> contributed revenues of Php173 million and other
businesses contributed Php55 million representing 62%, 27%, 8% and 3%,
respectively, of the total service revenues from our information and
communications technology business in 2004, compared to 63%, 26%, 8% and 3% in
2003.  </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">The following table summarizes
our total operating revenues from our information and communications technology
business for the years ended December 31, 2004 and 2003 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
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 <p align=center style='text-align:center;page-break-after:
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 </td>
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 padding:0in 5.4pt 0in 5.4pt'>
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 </td>
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 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
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 </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:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
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 </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 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase</b></p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
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 </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>2004</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>%</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>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=' 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>%</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;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>Amount</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:
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 </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>%</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  colspan=11 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">(in millions)</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">Service Revenues</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 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=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=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=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=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>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Call center</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">Php1,283</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">&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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">54</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">&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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php927</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">&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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">52</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">&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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php356</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">&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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Internet and gaming business</p>
 </td>
 <td  valign=bottom 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">569</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">&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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24</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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">380</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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">21</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">189</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">50</p>
 </td>
 </tr>
 <tr style='height:.15in'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <p style='text-indent:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Vitro&#153;</i> data center</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">173</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <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 5.4pt 0in 5.4pt;height:.15in'>
 <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=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <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 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">120</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <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 5.4pt 0in 5.4pt;height:.15in'>
 <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=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <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 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <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 5.4pt 0in 5.4pt;height:.15in'>
 <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>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 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">55</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 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</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">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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">40</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">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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">15</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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">38</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=' border:none;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">2,080</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;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">87</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;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">1,467</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;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">82</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;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">613</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;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">42</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">Non-service Revenues</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">&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;
 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='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 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=' 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">&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;
 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='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 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=' 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">&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;
 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='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:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Point of Product Sales</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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">321</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">&nbsp;</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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13</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">&nbsp;</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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">316</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">&nbsp;</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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18</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">&nbsp;</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: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 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=' border:none;border-bottom:solid windowtext 1.0pt;
 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">2</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">Total ICT Operating Revenues</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">Php2,401</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">100</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">Php1,783</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">100</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">Php618</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">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">35</p>
 </td>
 </tr>
</table></center></div>

<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"><i>Service Revenues</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Service revenues generated by our information and
communications technology business amounted to Php2,080 million in 2004, an
increase of Php613 million, or 42%, from Php1,467 million in 2003.  This was
primarily a result of the continued growth of our call center and Internet and
gaming businesses.</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"><i>Call</i><i> Center</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">Revenues related to our call center business in 2004
increased by Php356 million, or 38%, to <br>
Php1,283 million from Php927 million in 2003, primarily due to the combined
effects of the following: (1) Vocativ&#146;s upward price adjustment for voice and
VoIP, and an increase in programs being handled; and (2) an upward price
adjustment by Parlance for its inbound and outbound projects, coupled with an
increase in the number of registered minutes.</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">Call
center revenues accounted for 62% and 63% of our total information and
communications technology service revenues in 2004 and 2003, respectively.</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Internet and gaming</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' style="margin-top:0;margin-bottom:0">Revenues from our internet and gaming business for
2004 increased by Php189 million, or 50%, to Php569 million from Php380 million
in 2003 primarily due to the consolidation of Digital Paradise in June 2004.
Our Internet and gaming revenues accounted for 27% and 26% of total service
revenues from information and communications technology business in 2004 and
2003, respectively.</p>

<p style='text-indent:.5in;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"><i>Vitro&#153; </i>data
center</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">In
2004, <i>Vitro&#153;</i> contributed revenues of Php173 million, an increase of Php53
million, or 44%, from Php120 million in 2003, primarily due to an increase in
co-location revenues, server hosting and other services.  <i>Vitro&#153;</i>
revenues accounted for 8% of total service revenues from information and
communications technology business in 2004 and 2003.</p>

<p style='text-indent:.5in;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"><i>Others</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Revenues from other businesses related to our
information and communications technology segment in 2004 increased by Php15
million, or 38%, to Php55 million from Php40 million in 2003 largely due to IT
helpdesk/contact center services rendered coupled with an increase in number of
digital certificates sold.</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"><i>Non-service Revenues</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">Non-service
revenues consist of sales generated from reselling Microsoft software licenses
and Cisco hardware equipment.  In 2004, non-service revenues generated by our
information and communications technology business increased by Php5 million,
or 2%, to Php321 million prompted by higher point of product sales of Cisco
equipment and Microsoft licenses.</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 Expenses</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">Operating
expenses associated with our information and communications technology business
totaled Php3,035 million in 2004, an increase of Php763 million, or 34%, from
Php2,272 million in 2003, primarily due to an increase in compensation and
benefits, selling and promotions and asset impairment charge.  However, as a
percentage of our information and communications technology operating revenues,
operating expenses related to our information and communications technology
business decreased to 126% in 2004 from 127% 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">The
following table shows the breakdown of our total information and communications
technology-related operating expenses for the years ended December 31, 2004 and 2003 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:96.86%;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' 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   colspan=2 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   colspan=2 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>2004</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   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' 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' 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=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 style='page-break-inside:avoid;height:.15in'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:.15in'>
 <p style='margin-left:4.5pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=bottom style=' padding:0in 0in 0in 0in;
 height:.15in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:.15in'>
 <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;
 height:.15in'>
 <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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Information and communications technology services:</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   colspan=2 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: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=center style='margin-right:2.9pt;text-align:center' 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: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 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:4.3pt;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: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:6.5pt;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=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>
 </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">Compensation and benefits(1)</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">Php900</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' 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">30</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   colspan=2 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">Php533</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">23</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=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">Php367</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=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">69</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">Asset impairment </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">617</p>
 </td>
 <td   colspan=2 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">20</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:5.75pt;text-align:center' 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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">387</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">17</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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">230</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">59</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:4.95pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 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">Rent</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">366</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <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;height:4.95pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">12</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:4.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <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;height:4.95pt'>
 <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;height:4.95pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:4.95pt'>
 <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;height:4.95pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">29</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:4.95pt'>
 <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 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">9</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">Depreciation and amortization</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">339</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' 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">11</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   colspan=2 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">314</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:4.3pt;text-align:right' 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: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:6.5pt;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='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: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:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Repairs and maintenance</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">316</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' 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">11</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   colspan=2 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">184</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">8</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=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;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:2.9pt;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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">72</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">291</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' 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</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   colspan=2 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">35</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:4.3pt;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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">256</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=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">731</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">Professional and other contracted services </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">67</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' 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">2</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   colspan=2 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">66</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:4.3pt;text-align:right' 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: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:6.5pt;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: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:5.75pt;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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Communication, training and travel</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">70</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' 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">2</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   colspan=2 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">41</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:4.3pt;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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">29</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=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">71</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">21</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' 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">1</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   colspan=2 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">18</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:4.3pt;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: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:6.5pt;text-align:right' 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: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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">17</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 security services</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">7</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' 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">&#150;</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   colspan=2 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</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:4.3pt;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=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">(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=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">(30)</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">3</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' 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">&#150;</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   colspan=2 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">12</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:4.3pt;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: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:.05in;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=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">(75)</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:5.75pt;text-align:right' 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=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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</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   colspan=2 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">70</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:4.3pt;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=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">(70)</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=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">(100)</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">Other operating expenses</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">38</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' 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 align=center style='margin-right:2.9pt;text-align:center' 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 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">265</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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">12</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=bottom 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' style="margin-top:0;margin-bottom:0">(227)</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=bottom 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' style="margin-top:0;margin-bottom:0">(86)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.5pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php3,035</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <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:3.5pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' 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 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php2,272</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php763</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;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 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">34</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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other;
border:none' style="margin-top:0;margin-bottom:0">____________</p>

<p style='text-indent:.5in;line-height:3.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">(1)   Includes salaries and benefits, incentive plan,
pension and MRP costs.</p>

<p style='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 Php367 million, or 69%, to Php900 million
mainly due to the expansion of our call center facilities and consolidation of
Digital Paradise which resulted in an increase in headcount coupled with an increase
in salaries, bonuses and various incentives of employees.</p>

<p style='margin-left:0in;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">Asset impairment increased by Php230 million, or 59%,
to Php617 million due to an impairment provision recognized in 2004 in relation
to an investee company.  In 2003, we retired certain equipment with net book
values aggregating Php387 million primarily as a result of the abandonment of a
reloadable chip-based cash card project.</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">Rent expense increased by Php29 million, or 9%, to
Php366 million due to the consolidation of Digital Paradise with the opening of
several <i>Netopia</i> branches countrywide and abroad in 2004.  </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">Depreciation and amortization charges increased by
Php25 million, or 8%, to Php339 million primarily due to an increase in
depreciable asset base in relation to the expansion of our call center business
segment.</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">Repairs and maintenance expenses increased by Php132
million, or 72%, to Php316 million primarily due to a change in maintenance
agreement for higher annual maintenance in respect of our digital certificate
business.</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">Selling and promotion expenses increased by Php256
million, or 731%, to Php291 million mainly as a result of increased advertising
and promotions expense by <i>Netopia</i>.</p>

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

<p style='margin-left:0in;text-indent:.5in;line-height:
94%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Professional
and other contracted services increased by Php1 million, or 2%, to Php67 million
due to higher consultancy and legal fees in 2004 as compared to 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">Communication,
training and travel increased by Php29 million, or 71%, to Php70 million primarily
due to the consolidation of Digital Paradise in June and backbilling of ePLDT&#146;s
telephone charges pertaining to the periods 2002 to 2004.</p>

<p 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 Php3 million, or 17%, to Php21 million mainly on
account of higher business-related taxes paid in 2004 as compared to 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">Insurance
and security services decreased by Php3 million, or 30%, to Php7 million
primarily due to the divestment of Contact World, with high insurance and
security costs 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">Provision
for inventory obsolescence decreased by Php9 million, or 75%, mainly pertaining
to maintenance-related inventory items of Infocom.</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">Provision for doubtful accounts decreased by Php70
million, or 100%, primarily due to specifically identified uncollectible
subscriber accounts of Infocom already provided for in 2003.</p>

<p style='margin-left:0in;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 Php227 million,
or 86%, to Php38 million in line with our over-all cost containment
initiatives.</p>

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

<p align=left style='text-align:left' style="margin-top:0;margin-bottom:0"><i>Operating Loss</i></p>

<p align=left style='text-align:left' 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 information and communications technology
business registered an operating loss of Php634 million in 2004, an increase of
Php145 million, or 30%, compared to Php489 million in 2003 mainly due to higher
operating expenses mainly from the call center business in 2004 compared to
2003.</p>

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

<p align=left style='text-align:left' style="margin-top:0;margin-bottom:0"><i>Financing Costs</i></p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Financing costs associated with our information and
communications technology business, composed primarily of interest on loans and
related expenses, decreased by Php21 million, or 35%, to Php39 million
primarily due to lower interest expense on loans as debt balances declined in
2004 as compared to 2003.</p>

<p align=left style='text-align:left;line-height:9.0pt' 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"><b><i>Interest
Income</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
information and communications technology business generated an interest income
totaling Php18 million in 2004, an increase of Php11 million, or 157%, compared
to Php7 million in 2003 mainly attributable to Vitro&#146;sTM higher
average cash balances.</p>

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

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:left;
page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Other Income - Net</i></h6>

<p align=left style='text-align:left;line-height:9.0pt' 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">All other income/gains which do not fall under
service and non-service revenues are included under this classification.  Other
income generated from our information and communications technology business
segment declined by 88% to Php14 million in 2004 from Php120 million in 2003
due to a gain on the divestment of Contact World, Inc., a call center facility,
in 2003.  </p>

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

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Loss Before Income Tax, Cumulative Effect of Change in Accounting
Policy 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"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our information and communications technology business
recorded a loss before income tax<b><i>, </i></b>cumulative effect of change in
accounting policy and minority interest in net income of consolidated
subsidiaries amounting to Php643 million in 2004 compared to Php432 million in
2003.  The increase in net loss was mainly due to a substantial increase in
information and communications technology-related expenses of 34%, as well as
an 88% decline in other income.</p>

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

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:left;
page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Provision for (Benefit
from) Income Tax </i></h6>

<p align=left style='text-align:left;line-height:9.0pt' 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">Provision for income tax amounted to Php59 million
in 2004 an increase of Php123 million, or 192%, as compared to the benefit from
income tax of Php64 million recognized in 2003.  This was principally due to
Infocom&#146;s reversal of recorded deferred income tax asset of Php64 million in 2004.</p>

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

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:left;
page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Net Loss </i></h6>

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

<p style="margin-top:0;margin-bottom:0">In 2004, our information and
communications technology business segment registered a net loss of Php699
million, an increase of Php371 million, or 113%, compared to a net loss of
Php328 million posted in 2003.  This reflects the recorded increase in net
asset impairment charges and a reported net loss of Php116 million by Infocom
in 2004 compared to the net income of Php20 million in 2003, partially offset
by the increase in net income contribution of our call center business.</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='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 shows our consolidated cash flows,
capitalization and other selected financial data as at and for the years ended December 31, 2005, 2004 and 2003:</p>

<p style='text-indent:.5in;line-height:50%;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=5 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   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>2005</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>2004</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>2003</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style='margin-right:2.9pt;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 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">Cash Flows</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt' 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' style="margin-top:0;margin-bottom:0">Php64,969</p>
 </td>
 <td   colspan=3 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php62,860</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' style="margin-top:0;margin-bottom:0">Php42,582</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Net cash used in investing activities</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">13,080</p>
 </td>
 <td   colspan=3 valign=top style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">24,764</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">20,021</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' 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' style="margin-top:0;margin-bottom:0">15,864</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">19,268</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' style="margin-top:0;margin-bottom:0">17,943</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Net cash used in financing activities</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">48,159</p>
 </td>
 <td   colspan=3 valign=top style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">30,078</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">14,135</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' 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' style="margin-top:0;margin-bottom:0">(987)</p>
 </td>
 <td   colspan=3 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0">(69)</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' style="margin-top:0;margin-bottom:0">(28)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Net increase in cash and cash equivalents</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,743</p>
 </td>
 <td   colspan=3 valign=top style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.9pt;text-align:right' style="margin-top:0;margin-bottom:0">7,949</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">8,398</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:auto' 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="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 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='page-break-after:auto;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="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;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <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 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;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0"><b>2004</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style='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:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">Capitalization</p>
 </td>
 <td   colspan=2 valign=top 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>
 <td   valign=top 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>
 <td   colspan=2 valign=top 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;height:.1in'>
 <td   style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt;
 height:.1in'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0">Cash
 and cash equivalents</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;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Php30,064</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' 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;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Php27,321</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' style="margin-top:0;margin-bottom:0">Short-term debt</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' 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' 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' 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 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:4.5pt' style="margin-top:0;margin-bottom:0">Notes payable</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 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">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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   colspan=2 valign=top style=' background:#E0E0E0;
 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">58</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' style="margin-top:0;margin-bottom:0">Current portion of long-term debt</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' style="margin-top:0;margin-bottom:0">18,797</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' 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' style="margin-top:0;margin-bottom:0">28,020</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=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;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">93,516</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' 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;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">131,377</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=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">112,313</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">159,455</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=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">79,595</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">48,079</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=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">Php191,908</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">Php207,534</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>
 </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
at December 31, 2005, consolidated cash and cash equivalents amounted to Php30,064
million.  Our principal sources of consolidated cash in 2005 were cash flows
from operating activities amounting to Php64,969 million, drawings from
existing long-term credit facilities totaling Php10,797 million, and net equity
funds raised through PLDT's SIP amounting to Php334 million.  These funds were
used principally for capital expenditures of Php15,864 million (including
capitalized interest of Php504 million) and total debt principal repayments of
Php48,236 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 2004 and 2003 were cash flows from operating activities amounting to
Php62,860 million and Php42,582 million, respectively; drawings from long-term
and short-term credit facilities amounting to Php15,187 million and Php457
million, respectively, in 2004, and Php17,507 million and Php3,135 million,
respectively in 2003; and equity funds raised through the issuance of capital
stock amounting to Php281 million in 2004.  These funds were used principally
for capital expenditures of Php19,268 million (including capitalized interest
of Php595 million) and payments of long-term and short-term debt totaling to
Php44,109 million in 2004; and capital expenditures of Php17,943 million
(including capitalized interest of Php887 million) and payments of long-term
and short-term debt totaling to Php33,246 million and equity funds raised
through the issuance of capital stock amounting to Php94 million in 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"><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 2005 amounted
to Php64,969 million, an increase of Php2,109 million, or 3%, from Php62,860
million in 2004 and an increase of Php20,278 million, or 48% from Php42,582
million 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">A
growing portion of our consolidated cash flow is generated by our wireless and
data businesses.  The revenue contribution of these businesses has grown significantly
over the last three years with wireless business contributing 59%, in 2005, 57%
in 2004 and 53% in 2003, and data business contributing an average of 8% in 2005,
6% in 2004 and 2003 of our total service revenues.  Revenues from our local
exchange service accounted for approximately 16% of our total service revenues
in 2005, down from 17% in 2004 and from 20% 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">Cash flows from operating activities of our wireless
business in 2005 accounted for 70% of our consolidated cash flows from operating
activities owing to the growth of our cellular subscriber base and service
usage.  Our fixed line business contributed 29% to our consolidated cash flows
from operating activities in 2005 with improved collection efficiency and lower
cash expenses in line with our cost-containment efforts.  </p>

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

<p style="margin-top:0;margin-bottom:0">While 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, Smart has been able to obtain waivers from
Finnvera and certain of its lenders for each of the dividend payments made by
Smart to PLDT in 2004 and 2003 aggregating Php16,100 million and Php6,166
million, respectively.  Smart has also obtained the necessary consents from its
lenders to make similar distributions to PLDT in 2005, amounting to about Php20,000
million, of which dividends amounting to Php6,000 million, Php8,000 million,
Php3,225 million and Php2,492 million were paid by Smart to PLDT in March,
June, September and December 2005, respectively.  In September and December
2005, Smart redeemed 200 million and 180.8 million preferred shares,
respectively, previously issued to PLDT at a redemption price of Php13.875 per
share, or a total redemption price aggregating to Php5,283 million.</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">Our
net cash used in investing activities in 2005 amounted to Php13,080 million, a
decrease of Php11,684 million, or 47%, compared to Php24,764 million in 2004
and an increase of Php4,743 million, or 24%, from Php20,021 million in 2003.
The decrease in 2005 resulted from a decline in capital expenditures by Php3,404
million and a decrease in short-term investments of Php3,418 million largely
due to the maturity in 2004 of Smart&#146;s prepaid forward exchange contracts of
Php3,873 million.  The increase in 2004 was primarily the result of higher aggregate
capital spending.  </p>

<p style='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 capital expenditures in 2005 totaled Php15,864 million, a decrease
of Php3,404 million, or 18%, from Php19,268 million in 2004 primarily due to
Smart&#146;s and PLDT&#146;s lower capital spending.  Smart's capital spending of Php8,785
million in 2005 was used to roll-out its 3G network and further expand and
upgrade its transmission network facilities to increase capacity and coverage
in respect of basic and advanced cellular services.  PLDT's capital spending of
Php6,389 million was principally used to finance the expansion of its fixed
line data and IP-based network services.  ePLDT and its subsidiaries&#146; capital
spending of Php605 million was used to primarily fund its <i>Vitro</i>TM,
Digital Paradise and call center business operations.  The balances were spent
by other subsidiaries mainly PLDT Global, Mabuhay Satellite and Maratel.  In
2004, consolidated capital expenditures amounted to Php19,268 million, of which
Php14,735 million, Php3,917 million, Php500 million and Php80 million were
attributable to Smart, PLDT, ePLDT and PLDT Global, respectively.  The balance
represented other subsidiaries&#146; capital spending.  The increase in our
consolidated capital expenditures in 2004 of Php1,325 million, or 7%, was
largely attributable to PLDT and Smart.  PLDT's capital expenditures were principally
used to finance the continued build-out of its data and broadband/IP
infrastructure while Smart&#146;s capital spending was principally used to finance
the expansion of its GSM and transmission facilities due to the increasing
number of its subscriber base and network coverage.</p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">During 2005, we made certain
strategic investments aggregating Php248 million to strengthen our position in
the wireless and information and communications technology segments.&nbsp; Of
the Php248 million investment, Php238 million represented Smart's partial
payment of its investment in a wireless broadband and data service company, and
Php10 million pertained to ePLDT's investment in convertible debt securities of
a company engaged in a systems integration of Internet and mobile telephone
gaming project.</p>

<p style='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 growth strategy, we may from time to
time,
make acquisitions and investments in companies or businesses, which may or may
not be significant.  For example, on May 25, 2006, we announced that ePLDT and SPI Tech,
L.P. entered into a non-binding letter of interest in respect of a potential
acquisition by ePLDT of 100% of SPI, one of the leading pure-play BPO companies
and independent BPO service providers in the world. We believe that the
possible acquisition of SPI would solidify ePLDT&#146;s position as one of the
largest full service BPO companies.  For more information about the possible
acquisition, see &#147;Item&nbsp;4. Information on the
Company&#151;Organization.&#148;<b>  </b></p>

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

<p style="margin-top:0;margin-bottom:0">For 2006, we anticipate increasing
the level of our capital expenditures and equity investments.  Our 2006 budget
for consolidated capital expenditures is approximately Php19,759 million, of
which approximately Php9,300 million is budgeted to be spent by PLDT for its
fixed line data and network services and approximately Php8,635 million is
budgeted to be spent by Smart for further expansion and upgrading of its
digital network.</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='text-indent:.5in' style="margin-top:0;margin-bottom:0">On a
consolidated basis, we used net cash of Php48,159 million for financing
activities in 2005, compared to Php30,078 million in 2004 and Php14,135 million
in 2003.  The net cash used in financing activities in 2005, 2004 and 2003 was
mainly attributable to debt repayments and interest payments by PLDT in line
with its ongoing debt reduction program and, in 2005, dividend payments
distributed to common and preferred stockholders.  </p>

<p style='text-indent:.5in;page-break-after:avoid' 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>Debt Financing</i></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;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">Additions to our consolidated long-term
debt in 2005 totaled Php10,797 million from Smart&#146;s drawings related to the
refinancing of its Phase 5A/5B loan facilities.  Payments in respect of
principal of our long-term debt amounted to Php47,849 million in 2005, of which
Php34,700 million and Php12,182 million were attributable to PLDT and Smart,
respectively.</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' style="margin-top:0;margin-bottom:0">Our
consolidated indebtedness as at December 31, 2005 was Php112,313 million, lower
by Php47,142 million, or 30%, compared to Php159,455 million as at December 31,
2004 mainly due to the reductions of Php36,910 million and Php9,016 million in
PLDT&#146;s and Smart&#146;s indebtedness, respectively.  PLDT&#146;s non-consolidated
indebtedness decreased by 33%, from Php110,938 million as at December 31, 2004 to Php74,028 million as at December 31, 2005, due to debt payments in line with our thrust to reduce PLDT&#146;s overall indebtedness.  Smart&#146;s
indebtedness as at December 31, 2005 stood at Php35,079 million, a decrease of 20%
from Php44,095 million as at December 31, 2004.  On July 2, 2004, Smart
acquired from Piltel&#146;s creditors US$289 million, or 69.4%, in the aggregate of
Piltel&#146;s total outstanding restructured debt at that time, in exchange for
US$283.2 million, or Php15,854 million in July 2, 2004, in new debt of Smart
and US$1.5 million, or Php84 million, in cash.  Please see <i>Note 12 &#150;
Interest-bearing Financial Liabilities </i>to the accompanying consolidated
financial statements in Item 18 for further details.</p>

<p style='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 October 6, 2005, PLDT commenced a solicitation of consents from holders of its outstanding
11.375% Notes due 2012, or the 2012 Notes, to amend certain covenants under the
2012 Notes relating to the limitation on restricted payments and the limitation
on indebtedness.  In addition, PLDT commenced a cash tender offer for the aggregate
principal amount of US$71,986,000 of its 10.625% Notes due 2007, or the 2007
Notes, outstanding and a related solicitation of consents to effect identical
amendments to the 2007 Notes.</p>

<p style='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
received the requisite consents to effect the amendments to both the 2007 Notes
and the 2012 Notes, which give PLDT greater flexibility to make certain
restricted payments, including payment of dividends to holders of PLDT&#146;s common
stock, and reduce PLDT&#146;s permitted leverage ratio pursuant to the terms of the
notes.  At the conclusion of the cash tender offer, holders of approximately
US$50.9 million principal amount of the 2007 Notes representing approximately
71% of the outstanding 2007 Notes tendered their 2007 Notes.  As a result, an aggregate principal amount of the 2007
Notes of approximately US$21.1 million remained outstanding as of December 31,
2005.  Please see <i>Note 12 &#150; Interest-bearing Financial Liabilities </i>to the
accompanying consolidated financial statements in Item 18 for a more detailed
discussion of the consent solicitation for the 2012 Notes and the cash tender
offer and consent solicitation for the 2007 Notes.</p>

<p style='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
at December 31, 2005, PLDT had no undrawn committed long-term credit
facilities.  The JP&yen;3,095 million undrawn portion of the JP&yen;5,615 million
syndicated term loan facility supported by Nippon Export and Investment
Insurance of Japan, or NEXI, and US$4 million undrawn portion of the US$12
million term loan facility extended by DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH, or DEG, were cancelled at our request on December
3, 2004 and September 26, 2004, respectively.  In addition, PLDT also waived
further disbursements from the US$149 million Kreditanstalt fur Wiederaufbau
refinancing facility effective September 1, 2004, thus, cancelling the undrawn
portion of US$9 million.  All outstanding amounts under the JP&yen;5,615 million
syndicated term loan facility supported by NEXI and the US$12 million term loan
facility extended by DEG were repaid in full on June 13 and June 16, 2006,
respectively.  As at December 31, 2005, Smart had undrawn facilities of US$30
million pursuant to the commercial facility with Nordic Investment Bank and the
US$70 million loan facility with Finnish Export Credit Ltd., signed on August
8, 2005 and August 10, 2005, respectively, for its GSM Phase 8 financing.
These facilities are expected to be drawn in the second half of 2006.  As at December 31, 2005, Smart also had available facilities under its &#128;50 million
Framework Agreement with Bayerische Hypo-und Vereinsbank Aktiengesellschaft 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">The
scheduled maturities of our outstanding consolidated long-term debt as at December 31, 2005 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:472.5pt;margin-left:5.4pt;border-collapse:collapse'>
 <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;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Year</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"><b>&nbsp;</b></p>
 </td>
 <td  colspan=3 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>US$ Loans</b>(1)</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>&nbsp;</b></p>
 </td>
 <td  colspan=3 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>JP&yen; Loans</b>(2)</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>&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>Peso Loans</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=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>Total</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.75pt'>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.4pt 0in 5.4pt;height:10.75pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=11 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.75pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></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  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=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 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>
 <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>
 <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=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2006(3)</p>
 </td>
 <td  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=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">US$308</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">Php16,328</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">JP&yen;3,418</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">Php1,539</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">Php930</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>
 <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">Php18,797</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 style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td  style=' background:#F3F3F3;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">&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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">347</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='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 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">18,418</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='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 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">3,418</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='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 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">1,540</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='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 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">35</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,993</p>
 </td>
 </tr>
 <tr>
 <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">2008</p>
 </td>
 <td  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=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">110</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">5,839</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">1,709</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">770</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">24</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>
 <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">6,633</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 style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2009</p>
 </td>
 <td  style=' background:#F3F3F3;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">&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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">266</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='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 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">14,121</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='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 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">&#150;</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='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 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">&#150;</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='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 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">25</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,146</p>
 </td>
 </tr>
 <tr>
 <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">2010 </p>
 </td>
 <td  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=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">48</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">2,552</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">&#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">&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">&#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">&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">834</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>
 <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">3,386</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 style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2011 and onwards</p>
 </td>
 <td  style=' background:#F3F3F3;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">&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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">923</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='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 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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">48,978</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='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 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;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 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=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='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 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=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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">380</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=' 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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">49,358</p>
 </td>
 </tr>
 <tr>
 <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">&nbsp;</p>
 </td>
 <td  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=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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$2,002</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=' border:none;border-bottom:
 double windowtext 1.5pt;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">Php106,236</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=' border:none;border-bottom:
 double windowtext 1.5pt;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">JP&yen;8,545</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=' border:none;border-bottom:
 double windowtext 1.5pt;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">Php3,849</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=' border:none;border-bottom:
 double windowtext 1.5pt;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">Php2,228</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>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">Php112,313</p>
 </td>
 </tr>
</table></center></div>

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

<p style="margin-top:0;margin-bottom:0"><i>(1)        The exchange
rate used was Php53.062 to US$1.00.</i></p>

<p style="margin-top:0;margin-bottom:0"><i>(2)        The exchange
rate used was Php0.4504 to JP&yen;1.00.</i></p>

<p style="margin-top:0;margin-bottom:0"><i>(3)        January 1, 2006 to December 31, 2006.</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">Approximately Php62,955 million principal amount of
our consolidated outstanding long-term debt as at December 31, 2005 is
scheduled to mature over the period from 2006 to 2010.  Of this amount, Php44,877
million was attributable to PLDT, Php14,872 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 <i>Note 12 &#150; Interest-bearing
Financial Liabilities</i> to the accompanying consolidated financial statements
in Item 18 for an overview of our indebtedness. </p>

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

<p style='line-height:normal' style="margin-top:0;margin-bottom:0"><i>Debt Covenants</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 debt instruments contain
restrictive covenants, including covenants that could prohibit us from paying
dividends on common stock under certain circumstances, 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.  We have maintained compliance with all of our maintenance financial
ratios as required under our loan covenants 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 in 2005 and will continue to become more
restrictive in increments thereafter, which will make it more difficult for
PLDT to maintain compliance with such ratios 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.  In addition, we are required to comply with certain
financial ratios for the incurrence of capital expenditures in excess of US$10
million and incurrence of 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">In
particular, under our JP&yen;9,760 million loan agreement with JBIC, we are
required to obtain prior written consent of JBIC for capital expenditures in
excess of US$10 million, unless, among other things, our current ratio,
calculated on a non-consolidated basis and after taking into account such
expenditures, will not be less than 0.90:1.  As at March 31, 2006, our current ratio, as calculated under our debt covenants on a non-consolidated basis,
was 1.51:1.  We currently believe that our current ratio is unlikely to be less
than 0.90:1 due to a smaller current portion of our long-term debt going
forward.  As a result, we believe that our financial ratios currently do not
materially limit our ability to incur our budgeted capital expenditures or to
obtain additional financings.</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">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 our
consolidated subsidiaries, impairment or similar charges in respect of
investments of other long-lived assets that may be recognized by PLDT and its
consolidated subsidiaries and increases in our interest expense.  Interest
expenses 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 Philippine 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 98% of our total debts were
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.  The peso has been subject to significant fluctuations in recent
years.  From 2002 to 2004, the peso has generally been depreciating from a high
of Php49.336 on May 20, 2002 to a low of Php56.443 on October 14, 2004.  In 2005, the peso fluctuated significantly from a low of Php56.321 on July 8 to a
high of Php53.062 on December 29.  As at December 31, 2005, the peso had
appreciated by 5.8% to Php53.062 to US$1.00, from Php56.341 to US$1.00 as at
December 31, 2004.  </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&#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, which is predominantly conducted by PLDT.  PLDT cannot be
assured of the benefit of net revenues and cash flows generated by Smart and
PLDT&#146;s other investees in assisting PLDT 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='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 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: (a) incurring additional indebtedness; (b)
prepaying other debt; (c) making investments; (d) extending loans; (e) extending
guarantees or assuming the obligations of other persons; (f) paying dividends
or other distributions or redeeming, repurchasing or otherwise acquiring shares
of PLDT&#146;s capital stock; (g) disposing of all or substantially all of its
assets or of assets in excess of specified thresholds of its tangible net
worth; (h) entering into management contracts providing for the management of
its business or operations by a third party; (i) creating any lien or security
interest; (j) permitting set-off against amounts owed to PLDT; (k) merging or
consolidating with any other company; <br>
(l) entering into transactions with stockholders and affiliates; and (m)
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">Further,
certain of PLDT&#146;s debt instruments contain provisions wherein PLDT may be
required to repurchase or prepay certain indebtedness in case of change in
control of PLDT or if the ownership of our shares of common stock held by NTT
Communications falls below a certain threshold.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Moreover,
certain of PLDT&#146;s debt instruments restrict PLDT from declaring or distributing
dividends to common stockholders.  In particular, under certain 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 0.90:1 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='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&#146; and First Pacific&#146;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&#146;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&#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, <br>
(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&#146;s GSM network capacity to extend PLDT&#146;s cellular
business in Smart would not be reduced below its level of participation as at
the date of the loan agreement.</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&#146;s debt instruments also contain customary and
other default provisions that permit the lender to accelerate amounts due or
terminate their commitments to extend additional funds under the debt
instruments. These default provisions include: (a) 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; (b) failure by PLDT to meet certain
financial ratio covenants referred to above; (c) 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; (d) the revocation, termination or amendment of any of the
permits or franchises of PLDT in any manner unacceptable to the lender; <br>
(e) the abandonment, termination or amendment of the project financed by a loan
in a manner unacceptable to the lender; (f) the nationalization or sustained
discontinuance of all or a substantial portion of PLDT&#146;s business; and <br>
(g) other typical events of default, including the commencement of bankruptcy,
insolvency, liquidation or winding up proceedings by PLDT.</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">Smart&#146;s debt instruments contain certain
restrictive covenants, including covenants that prohibit Smart from paying
dividends, redeeming preferred stock, making distributions to PLDT or otherwise
providing funds to PLDT or any affiliate without the consent of its lenders
under its Phases 1, 2 and 3 facilities.  Also, Smart&#146;s debt instruments contain
certain restrictive covenants that require Smart to comply with specified financial
ratios and other financial tests 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: (a) 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; (b) failure by Smart to comply with certain
financial ratio covenants; (c) any reduction in PLDT&#146;s ownership of Smart&#146;s
shares below 51%; (d) 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; and (e) 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.</p>

<p style='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
at December 31, 2005, Piltel was 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).  Piltel may not be able
to restructure or otherwise pay the claims of its unrestructured debt.
However, default on and acceleration of Piltel&#146;s unrestructured indebtedness
does not create a cross-default under Piltel&#146;s restructured indebtedness or any
indebtedness of PLDT or Smart.</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 Credit and Omnibus Agreements of Mabuhay Satellite
imposes several negative covenants.  In particular, these covenants, among
other things, 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' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">ePLDT&#146;s
loan agreement imposes negative covenants which, among other things, restrict
ePLDT in regard to payment of cash dividends or any other income or any capital
distribution to PLDT, 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 shares pledged.  One of ePLDT&#146;s loan agreements
also requires ePLDT to comply with specified financial ratios and other
financial tests at quarterly measurement dates.  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 at December 31, 2005, ePLDT has complied with all of
its financial covenants.</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>Financing Requirements</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">We
believe that our available cash, including cash flow from operations, will
provide sufficient liquidity to fund our projected operating, investment,
capital expenditures and debt service requirements for the next 12 months.  </p>

<p style='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, we have been utilizing internally generated cash, particularly from our wireless
business, to reduce our overall level of indebtedness.  In line with this
objective, we have managed our capital expenditures, reduced our investments
and suspended dividend payments to common shareholders from April 2001 to
2004.  As a result of our improving cash flows and reduced debt levels, we have
restored the payment of common dividends in May 2005 and currently intend to
gradually increase our dividend payout ratio in succeeding years as we expect
to improve our leverage ratios.</p>

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

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><i>Credit
Ratings</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">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 align=left style='text-align:left;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:410.95pt;margin-left:29.3pt;border-collapse:collapse'>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b><u>Rating Agency</u></b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b><u>Credit Rating</u></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><u>Outlook</u></b></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>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Moody&#146;s Investor Service</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Foreign Currency Senior
 Unsecured Debt Rating</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Ba2</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Negative</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">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Local Currency Corporate
 Family Rating</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Ba1</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Positive</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>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Standard and Poor&#146;s</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Foreign Currency Senior
 Unsecured Debt Rating</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">BB+</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Stable</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>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Fitch</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Long-term Foreign Currency
 Rating</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">BB</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Stable</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">Long-term Local Currency
 Rating</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">BB+</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Stable</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style='width:109.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;background:#E0E0E0 !msorm;
 padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style='width:189.9pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;background:#E0E0E0 !msorm;
 padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Long-term Foreign Currency
 Issuer Default Rating</p>
 </td>
 <td  valign=top style='width:45.5pt; background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;background:#E0E0E0 !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">BB</p>
 </td>
 <td  valign=top style='width:66.05pt; background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;background:#E0E0E0 !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Stable</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style='width:109.5pt;
 background:#E0E0E0;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='width:189.9pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Long-term Local Currency
 Issuer Default Rating</p>
 </td>
 <td  valign=top style='width:45.5pt; background:
 #E0E0E0;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">BBB-</p>
 </td>
 <td  valign=top style='width:66.05pt; background:
 #E0E0E0;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Positive</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style='width:109.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;background:#E0E0E0 !msorm;
 padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style='width:189.9pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;background:#E0E0E0 !msorm;
 padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">National Long-term Rating</p>
 </td>
 <td  valign=top style='width:45.5pt; background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;background:#E0E0E0 !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">AAA(ph1)</p>
 </td>
 <td  valign=top style='width:66.05pt; background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;background:#E0E0E0 !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Stable</p>
 </td>
 </tr>
</table></center></div>

<p align=left style='line-height:normal !msorm;text-align:
left;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:0in !msorm;page-break-after:auto !msorm;
text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On June 7, 2006, Fitch Ratings upgraded PLDT&#146;s long-term local currency Issuer Default
Rating, or IDR, to &#147;BBB-&#147; from &#147;BB+&#148; with a positive outlook.  At the same
time, Fitch affirmed PLDT&#146;s long-term foreign currency IDR of &#147;BB&#148; with a
stable outlook, reflecting the outlook on the Republic of the Philippines&#146; long-term foreign currency IDR of &#147;BB.&#148;  Following the licensing of Fitch to provide
National ratings in the Philippines, Fitch assigned PLDT a National long-term
rating of &#147;AAA(ph1)&#148; with a stable outlook.</p>

<p align=left style='text-align:left;line-height:8.0pt' 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">On March 29, 2006, Moody&#146;s Investor Service, or
Moody&#146;s, placed the Ba1 local currency corporate family rating of PLDT on
review for possible upgrade.  At the same time, Moody&#146;s affirmed PLDT&#146;s Ba2
foreign currency senior unsecured ratings, with a negative outlook.</p>

<p style='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 20, 2006, Fitch Ratings revised its outlook on PLDT&#146;s long-term foreign currency
from negative to stable.  PLDT&#146;s long-term foreign currency, global bonds and
senior notes were affirmed at &#147;BB&#148; and convertible preferred stock at &#147;B+.&#148;
The revision in outlook reflects that of the outlook of the Republic of the Philippines as foreign currency and senior debt instrument ratings are constrained by the
sovereign foreign currency rating.  At the same time, PLDT&#146;s long-term local
currency rating has been affirmed at &#147;BB+&#148; with a stable outlook.</p>

<p 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>Off-balance Sheet Arrangements</i></p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">There are no
off-balance sheet arrangements that have or are reasonably likely to have any current or
future effect on our financial position, results
of operations, cash flows, changes in stockholders&#146;
equity, liquidity, capital
expenditures or capital resources that are material to investors.</p>

<p 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>Equity Financing</i></p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT raised Php275 million and Php274 million from the
exercise by certain officers and executives of stock options in 2005 and 2004,
respectively.  In addition, through our subscriber investment plan, or 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 Php59 million, Php7 million
and Php94 million in 2005, 2004 and 2003, respectively.  </p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Cash dividend payments in 2005 amounted to Php11,173
million, of which Php9,587 million and Php1,586 million were paid to common and
preferred shareholders, respectively, compared to Php1,692 million in 2004, all
of which were paid to preferred shareholders of PLDT.  On March 1, 2005, PLDT declared cash dividends of Php14 per common share to holders of record as at March 31, 2005, which were paid on May 12, 2005.  This was the first cash dividend
declaration to common shareholders in four years since April 2001.  In
addition, on each of May 5, 2005 and November 8, 2005, PLDT declared cash dividends of Php21 per common share to holders of record as at June 3, 2005 and November 28, 2005 paid on July 14, 2005 and December 28, 2005, respectively.  On February 27, 2006, PLDT declared cash dividends of Php28 per common share to holders
of record as at March 20, 2006 paid on <br>
April 20, 2006.</p>

<p style='margin-left:0in;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
at December 19, 2005, all of the 4,616,200 outstanding shares of PLDT&#146;s Series
III Convertible Preferred Stock were mandatorily converted into common shares
at 1.7129 common shares for every Series III Convertible Preferred Stock resulting
in the issuance of 7,907,032 common shares of PLDT.  See <i>Note 15 &#150; Stockholders&#146;
Equity</i> to the accompanying consolidated financial statements in Item 18 for
further discussion.  </p>

<p style='margin-left:0in;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
at December 31, 2005, PLDT has 180,789,003 common shares outstanding.</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='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 discloses our contractual obligations outstanding as at December 31, 2005:</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 style='page-break-inside:avoid;height:14.3pt'>
 <td   rowspan=2 valign=top style=' padding:0in 0in 0in 0in;
 height:14.3pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   rowspan=2 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:14.3pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Long-term debt </b></p>
 </td>
 <td   rowspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:14.3pt'>
 <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=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:14.3pt'>
 <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   rowspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:14.3pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   rowspan=2 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:14.3pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Unconditional purchase <br>
 obligations</b>(1)</p>
 </td>
 <td   rowspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:14.3pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   rowspan=2 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:14.3pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Other<br>
 long-term obligations</b></p>
 </td>
 <td   rowspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:14.3pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   rowspan=2 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:14.3pt'>
 <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;height:14.25pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:14.25pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Operating </b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:14.25pt'>
 <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;height:14.25pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Capital</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">(in millions)</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 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">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">Php18,797</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">Php631</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">Php895</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">Php4,969</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">Php25,292</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">19,993</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">605</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">341</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">1,061</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">22,000</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">6,633</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">486</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">14</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">1,061</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">8,194</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</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">14,146</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">463</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">7</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">1,062</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">8,844</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">24,522</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">2010</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">3,386</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">392</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">8</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">1,061</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">7,046</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">11,893</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">2011 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">49,358</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">1,059</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=' 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">435</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">3,184</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">&#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=' 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">54,036</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">Php112,313</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">Php3,636</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">Php1,700</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">Php12,398</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">Php15,890</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">Php145,937</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:0in;text-indent:0in' style="margin-top:0;margin-bottom:0"><i>____________</i></p>

<p style='margin-left:0in;text-indent:0in' style="margin-top:0;margin-bottom:0"><i>(1)   Based on the original Air Time
Purchase Agreement with AIL.</i></p>

<p style='text-indent:0in' 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
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, see <i>Note 12 &#150; Interest-bearing
Financial Liabilities</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"><i>Long-term
Operating 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>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 at December 31, 2005, PLDT&#146;s aggregate remaining obligation under these contracts amounted to
approximately Php17 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 (Australia) 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 at December 31, 2005, PLDT&#146;s aggregate remaining obligation under this
agreement was approximately Php30 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 Operating Lease Obligations</i></b>.   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 Php3,272 million as at December 31, 2005 in respect of office and cell site rentals with over 3,000 lessors
nationwide, PLDT has lease obligations aggregating Php119 million as at December 31, 2005, and ePLDT has lease obligations aggregating Php198 million as at December 31, 2005 in respect of certain office space rentals.</p>

<p style='text-indent:.5in;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"><i>Long-term Capital Lease Obligations</i></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='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">For a discussion of our long-term capital lease
obligations, see <i>Note 12 &#150; Interest-bearing Financial Liabilities</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='text-indent:.5in' style="margin-top:0;margin-bottom:0"><a name="OLE_LINK7"></a><a
name="OLE_LINK6"><i>Unconditional Purchase
Obligations</i></a></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><i>Air
time Purchase Agreement with AIL</i></b>.
PLDT is a party to a Founder NSP Air Time Purchase Agreement entered into with
AIL in March 1997, which was amended in December 1998, under which PLDT was
granted the exclusive right to sell AIL services in the Philippines.  In
exchange, the Air Time Purchase Agreement required PLDT to purchase from AIL a
minimum of US$5 million worth of air time annually over ten years commencing on
January 1, 2002, the date of commercial operations of the Garuda I Satellite.  </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 the event AIL&#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='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='margin-bottom:0in;margin-bottom:.0001pt' 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.  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.  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 would cover, among other things, the
amended minimum and supplemental air time payment provisions subject to the
approval of AIL&#146;s creditors.  </p>

<p style='text-indent:.5in;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">On
February 10, 2004, notwithstanding the ongoing negotiations, AIL advised PLDT
of the termination of the Standstill Agreement and the reinstatement of the
terms under the original Air Time Purchase Agreement effective January 1, 2002
following the lapse of the November 15, 2003 deadline set in the Standstill
Agreement for the negotiation of a revised Air Time Purchase Agreement.
Negotiations are continuing with the relevant parties towards an amicable
settlement of this matter.  See <i>Note 16 &#150; Related Party Transactions</i> and
<i>Note 22 &#150; Provisions and Contingencies </i>to the accompanying consolidated
financial statements in Item 18 for further discussion.  </p>

<p style='text-indent:.5in;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">As
at December 31, 2005, PLDT&#146;s aggregate remaining minimum obligation under the
original Air Time Purchase Agreement was approximately Php11,120 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"><b><i>License
Purchase Agreement with I-Contact Solutions Pte. Ltd</i></b><i>.</i>  On April 2, 2003, iPlus, a wholly-owned subsidiary of ePLDT and the Philippines&#146; pioneer in IP-based IT response center, 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 services.  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
delivered 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 necessary support in terms of
sales, marketing, and technical services.  Effective March 30, 2004, I-Contact agreed to amend the agreement and waived all financial obligations and
committed seats requirement over the two-year period.  iPlus will pay all its
remaining obligations pertaining only to the 300 seats delivered by I-Contact.</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>Sale</i></b><b><i> and Purchase Agreement with</i></b><i> <b>Smart Broadband</b>.  </i>For a discussion of our sale and purchase agreement
with Smart Broadband with a remaining obligation of Php1,278 million as at
December 31, 2005, see <br>
<i>Note 9 &#150; Goodwill and Other Intangible Assets </i>to the accompanying
consolidated financial statements in Item 18.</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>Other Long-term Obligations</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"><b><i>Mandatory Conversion and Purchase of Shares</i></b>.   As at December 31, 2005, PLDT had issued a total
of <br>
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 adopted in June 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">Each
share of Series V, VI and VII Convertible Preferred Stock is convertible at any
time at the option of the holder into one PLDT common share.  On the date
immediately following the seventh anniversary of the issue date of the Series V
and Series VI Convertible Preferred Stocks 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 PLDT
common shares.  Under a put option exercisable for 30 days, holders of common
shares received on mandatory conversion of the Series V, VI and VII Convertible
Preferred Stocks will be able to require PLDT to purchase such PLDT common
shares for Php1,700 per share, US$36.132 per share, and JPY4,071.89 per
share, respectively.  </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">As at December 31, 2005, 2,480,553 shares of Series V
Convertible Preferred Stock and 896,190 shares of Series VI Convertible
Preferred Stock had been converted to PLDT common shares.  As at December 31, 2005, 240,887 shares of Series V, 4,398,914 shares of Series VI and 3,842,000
shares of Series VII Convertible Preferred Stocks remained outstanding.  The
aggregate value of the put option based on outstanding shares as at December
31, 2005 was Php15,890 million, of which Php8,844 million is puttable on June
4, 2008 and Php7,046 million on June 4, 2009, if all of the outstanding shares
of Series V, VI and VII Convertible Preferred Stocks were mandatorily converted
and all the underlying common shares were put to PLDT.  The market value of the
underlying shares of common stock was Php15,564 million, based on the market
price of PLDT common shares of Php1,835 per share as at December 31, 2005.</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;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 at December 31, 2005, our outstanding commercial
commitments, in the form of letters of credit, amounted to Php1,493 million.
These commitments will expire within one year.</p>

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

<p style="margin-top:0;margin-bottom:0"><a name="OLE_LINK22"></a><a name="OLE_LINK21"></a><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, we do not believe
inflation has had a material impact on our operations.  The average inflation
rate in the Philippines in 2005 was 7.6%, compared to 6.0% in 2004.</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="_Toc75779220"></a><a
name="_Toc46082279">Other Information</a></p>

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

<p style="margin-top:0;margin-bottom:0"><i>ePLDT&#146;s Proposed
Acquisition of SPI Technologies</i></p>

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

<p style="margin-top:0;margin-bottom:0">On May 25, 2006, we announced
that ePLDT and SPI Tech, L.P. entered into a non-binding letter of interest in
respect of a potential acquisition by ePLDT of 100% of SPI, one of the leading
pure-play BPO companies and independent BPO service providers in the world. For
more information about the possible acquisition, see &#147;Item&nbsp;4. Information on the Company&#151;Organization.&#148;<b>  </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"><i>Smart&#146;s 20% Acquisition of WolfPac</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">On May 8, 2006, Smart signed a share purchase
agreement to acquire the remaining 20% equity interest in Wolfpac, a company
engaged in the business of consumer mobile applications software development
and content development.&nbsp; Smart acquired an 80% equity interest in Wolfpac
in October 2003.</p>

<p align=left style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.55in;margin-bottom:.0001pt;text-align:left;line-height:9.0pt;
page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h6>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
text-indent:0in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>ePLDT&#146;s Investment in Philweb</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' style="margin-top:0;margin-bottom:0">On
 May 5, 2006, ePLDT and Philweb Corporation, or Philweb, signed an investment
agreement and subscription agreement for ePLDT to invest in and subscribe to
newly issued common shares equivalent to 20% of Philweb&#146;s outstanding common
stock for an aggregate amount of Php502.4 million.  Philweb is primarily
engaged in Internet-based gaming and is currently expected to enable the PLDT
Group to gain a firm hold on legitimate gaming content for the PLDT Group&#146;s
cellular, fixed line and wireless broadband businesses thereby increasing the
PLDT Group&#146;s usage of its various network resources. </p>

<p align=left style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.55in;margin-bottom:.0001pt;text-align:left;line-height:9.0pt' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h6>

<p style="margin-top:0;margin-bottom:0"><i>Launch of Pwede! Card</i></p>

<p align=left style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.55in;margin-bottom:.0001pt;text-align:left;line-height:9.0pt' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h6>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On May 5, 2006, PLDT and Smart launched the <i>Pwede! Card</i>, a convergent product made
possible by our NGN capability.  <i>Pwede! Card</i> is&nbsp;the first
reloadable PIN-based prepaid card that provides access to a variety of voice
and Internet services at affordable rates.&nbsp; <i>Pwede! Card</i> is
applicable to a host of fixed line and wireless services including local,
domestic and international long distance calls, text messaging, payphones and
prepaid Internet connection.</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>ePLDT&#146;s Acquisition of Level Up!</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">On February 16, 2006, ePLDT acquired a 60% equity
interest in Level Up!, a leading publisher of online games in the Philippines with about an 80% share of the online gaming market. &nbsp;The acquisition of
Level Up!, together with netGames, ePLDT&#146;s online gaming subsidiary, will
strengthen the position of ePLDT as the dominant online gaming company in the
country.</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>Strategic Partnership
Among PLDT, NTT Communications and DoCoMo</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 the Stock Sale and Purchase Agreement dated January 31, 2006
between NTT Communications and DoCoMo, pursuant to which DoCoMo on March 14,
2006 acquired from NTT Communications approximately 12.6 million common shares
of PLDT, representing approximately 7% of the outstanding shares of PLDT&#146;s
common stock, PLDT, the FP Parties, NTT Communications and DoCoMo entered into
a Cooperation Agreement, dated January 31, 2006.  Under the Cooperation
Agreement, the relevant parties extended certain rights of NTT Communications
thereunder to DoCoMo and agreed to enter into certain strategic business
relationships in the field of mobile communication services.  For more
information about the Cooperation Agreement, see &#147;Item 7. Major Shareholders
and Related Party Transactions &#150; Related Party Transactions &#150; Cooperation
Agreement with DoCoMo.&#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"><a name="_Toc75779222"></a><a
name="_Toc46082281">Item 6.        Directors,
Senior Management and Employees</a></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
9.0pt;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='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='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), key officers and advisors of
PLDT as at May 31, 2006 are as follows:</p>

<p style='text-align:justify' 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'>

 <tr>
 <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"><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'>
 <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'>
 <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'>
 <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'>
 <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'>
 <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'>
 <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=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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 align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">59</p>
 </td>
 <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">&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">Director </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">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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'>
 <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'>
 <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'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Chairman
 of the Board </p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style='text-align:justify' 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'>
 <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'>
 <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'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">56</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Director</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">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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'>
 <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=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 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'>
 <p style="margin-top:0;margin-bottom:0">President and Chief</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 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'>
 <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'>
 <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'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Executive Officer </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>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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'>
 <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=center style='text-align:center' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Director</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 style="margin-top:0;margin-bottom:0">April 21, 1982 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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'>
 <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=center style='text-align:center' style="margin-top:0;margin-bottom:0">61</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Director</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 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'>
 <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'>
 <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'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">65</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Director</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">September 25, 2001 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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'>
 <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=center style='text-align:center' style="margin-top:0;margin-bottom:0">66</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Director</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 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'>
 <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'>
 <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'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 <p style="margin-top:0;margin-bottom:0">ePLDT President</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">November 24, 1998 to present</p>
 <p style="margin-top:0;margin-bottom:0">July 1, 2000 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Rev. Fr. Bienvenido F. Nebres, S.J. </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=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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Independent Director</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 style="margin-top:0;margin-bottom:0">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr style='height:9.45pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.45pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Pedro
 E. Roxas</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.45pt'>
 <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:9.45pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.45pt'>
 <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;height:9.45pt'>
 <p style="margin-top:0;margin-bottom:0">Independent Director</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:9.45pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:9.45pt'>
 <p style="margin-top:0;margin-bottom:0">March 1, 2001 to present</p>
 </td>
 </tr>
 <tr style='height:11.7pt'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:11.7pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Oscar
 S. Reyes </p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:11.7pt'>
 <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;
 height:11.7pt'>
 <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;
 height:11.7pt'>
 <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;height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">Independent Director</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:11.7pt'>
 <p style="margin-top:0;margin-bottom:0">April 5, 2005 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Tatsu
 Kono(1)</p>
 </td>
 <td  valign=top 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=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Director</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">March 28, 2006 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Shigeru
 Yoshida</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=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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Director</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 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'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Teresita
 T. Sy-Coson(2)</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=center style='text-align:center' style="margin-top:0;margin-bottom:0">55</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Independent Director</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 style="margin-top:0;margin-bottom:0">June 8, 2004 to present</p>
 </td>
 </tr>
 <tr style='height:10.35pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:10.35pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Ma. Lourdes C. Rausa-Chan</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:10.35pt'>
 <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:10.35pt'>
 <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;
 height:10.35pt'>
 <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;height:10.35pt'>
 <p style="margin-top:0;margin-bottom:0">Corporate Secretary</p>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President,
 Corporate Affairs and Legal Services Head</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:10.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:10.35pt'>
 <p style="margin-top:0;margin-bottom:0">November 24, 1998 to present</p>
 <p style="margin-top:0;margin-bottom:0">January 5, 1999 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Anabelle L. Chua</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=center style='text-align:center' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Treasurer</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 style="margin-top:0;margin-bottom:0">February 1, 1999 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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'>
 <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'>
 <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'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Senior
 Vice President </p>
 <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'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">February 26, 2002
 to present </p>
 <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'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Rene G. Ba&#241;ez</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 align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">51</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;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=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Senior Vice President<br>
 Chief Governance Officer</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">January 25, 2005 to present</p>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">October 5, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">George
 N. Lim</p>
 </td>
 <td  valign=top 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=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President <br>
 Network Services Head</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">February 26, 1999 to present</p>
 <p style="margin-top:0;margin-bottom:0">February 1, 2003 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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:#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 align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;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=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Senior Vice President </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">July 1, 1999 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Retail Business Head</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">February 1, 2003 to June 15, 2004</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">International and Carrier <br>
 Business Head</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">June 16, 2004 to December 4, 2005</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Consumer Affairs Head</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">December 5, 2005 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Victorico
 P. Vargas</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=center style='text-align:center' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President<br>
 Human Resources Head</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 style="margin-top:0;margin-bottom:0">February 15, 2000 to present <br>
 <br>
 </p>
 </td>
 </tr>
 <tr style='height:20.25pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;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:#F3F3F3;padding:0in 0in 0in 0in;
 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:#F3F3F3;padding:0in 0in 0in 0in;
 height:20.25pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">57</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:20.25pt'>
 <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;height:20.25pt'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President<br>
 Call Center Business Head</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:20.25pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:20.25pt'>
 <p style="margin-top:0;margin-bottom:0">July 10, 2000 to present</p>
 <p style="margin-top:0;margin-bottom:0">February 1, 2003 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Alfredo
 S. Panlilio</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=center style='text-align:center' style="margin-top:0;margin-bottom:0">42</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President</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 style="margin-top:0;margin-bottom:0">May 8, 2001 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">International and Carrier
 Business Head</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">February 1, 2003 to June 15, 2004</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">PLDT Global Corporation
 President</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">June 16, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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'>
 <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=center style='text-align:center' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President <br>
 Corporate Business Head</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 style="margin-top:0;margin-bottom:0">May 15, 2003 to present</p>
 <p 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='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'>
 <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'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President</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">December 9, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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'>
 <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=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 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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">December 1, 2001 to June 15, 2004</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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'>
 <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=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 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'>
 <p style="margin-top:0;margin-bottom:0">Retail Business Head</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 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'>
 <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'>
 <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'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President</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">June 14, 2005 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Audit and Assurance Head </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">September 1, 2000 to February 15, 2006</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">Internal Audit and Fraud
 Risk Management 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 16, 2006 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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'>
 <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'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">44</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">First Vice President</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">January 31, 2003 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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'>
 <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=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 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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <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'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Christopher
 H. Young</p>
 </td>
 <td  valign=top 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=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Chief Financial Advisor </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">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Donald
 J. Rae</p>
 </td>
 <td  valign=top 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=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Chief Operations Advisor of
 Smart</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">January 1, 1999 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Rolando G. Pe&#241;a</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=center style='text-align:center' style="margin-top:0;margin-bottom:0">44</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Network Services Head of
 Smart</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 style="margin-top:0;margin-bottom:0">September 1, 1994 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Ramoncito S. Fernandez</p>
 </td>
 <td  valign=top 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=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">Administration and Materials
 Management Head of Smart </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">June 16, 2000 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">George H. Tan</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=center style='text-align:center' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <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'>
 <p style="margin-top:0;margin-bottom:0">ePLDT Chief Finance Officer</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 style="margin-top:0;margin-bottom:0">September 15,
 2000 to present</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0">__________</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Mr. Kono was elected to fill
the vacancy resulting from Mr. Haruhiko Yamada&#146;s resignation on March 27,
2006.  Mr. Yamada was elected on August 4, 2005 to replace Mr. Sadao Maki and
had served on the board until March 27, 2006.</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>All of the incumbent
directors/independent directors, except for Ms. Teresita T. Sy-Coson, have been
re-elected at the annual meeting of shareholders held on June 13, 2006.  Mr.
Alfred Vy Ty was elected as independent director in lieu of Ms. Teresita T.
Sy-Coson who was not seeking re-election in order to focus on her various
duties under the SM Group of Companies.</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, as amended by the Cooperation Agreement dated January 31, 2006, NTT Communications is entitled to nominate two directors to the PLDT board of directors
and First Pacific and its affiliates are entitled to nominate six directors.
The Shareholders Agreement also entitles NTT Communications to nominate two
directors to the board of directors of Smart and, subject to specified
conditions, one member to the board of directors of all other PLDT
subsidiaries.  As a result of the Cooperation Agreement, in respect of NTT
Communications&#146; right to nominate two directors to each of the board of
directors of PLDT and Smart, respectively, NTT Communications and the FP
Parties agreed to vote as a PLDT shareholder, lobby the directors of PLDT and
otherwise use reasonable efforts to procure a shareholders&#146; vote in favor of
replacing on each of the board of directors of PLDT and Smart, respectively,
one NTT Communications nominee with one DoCoMo nominee.  Under the Shareholders
Agreement, NTT Communications is also entitled to appoint members or advisors
of certain PLDT management and board committees, including the audit,
governance and nomination, executive compensation and finance committees
described below under &#147;&#151; Audit, Governance and Nomination, Executive
Compensation and Finance Committees,&#148; and as a result of the Cooperation
Agreement, the FP Parties and NTT Communications agreed to use reasonable
efforts to procure that DoCoMo be entitled to appoint one individual, who may
be replaced at any time, to attend any board committee of PLDT as a member,
advisor or observer.  Upon NTT Communications, DoCoMo and their subsidiaries
owning in the aggregate 20% or more of the shares of PLDT&#146;s common stock and
for as long as NTT Communications, DoCoMo and their subsidiaries continue to
own in the aggregate 17.5% of the shares of PLDT&#146;s common stock then
outstanding, DoCoMo will be entitled to nominate one additional DoCoMo nominee
to the board of directors of each of PLDT and Smart.   Under the Shareholders
Agreement and the Cooperation 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. For more information about the Cooperation
Agreement, see &#147; Item 7. Major Shareholders and Related Party Transactions &#150;
Related Party Transactions &#150; Cooperation Agreement with the FP Parties, NTT
Communications and DoCoMo.&#148;</p>

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

<p style="margin-top:0;margin-bottom:0">The business address of Donald J.
Rae, Ramoncito S. Fernandez and Rolando G. Pe&#241;a is Smart Tower II, Ayala Avenue, Makati City, Philippines and the business address of George H. Tan is L.V. Locsin Building, 6752 Ayala Avenue, Makati City.  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' 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' 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 and the managing director of First Pacific.  He assumed the
chairmanship of our board in February 2004 after serving as president and chief
executive officer for over five years since November 1998.  During his
presidency, he led the successful transformation of PLDT from a traditional
plain old telephony service (voice) into a convergent voice, data, video
(multi-media) service.  He is the chairman of the Governance and Nomination
Committee of PLDT.  He is also the chairman of the boards of Smart, Piltel,
ePLDT and Metro Pacific Corporation, and the 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. and several
property development and management companies.  He founded and was the Managing
Director of First Pacific from 1981 and served as its executive chairman from
February 1999 until he was re-appointed as managing director in June 2003.  In
2005, he was named &#147;Management Man of the Year,&#148; a prestigious award that the
Management Association of the Philippines bestows on individuals in the
business community or government for attaining unquestioned distinction in the
practice of management and for contributing to the country&#146;s progress.  He was
chosen for, among his other achievements, engineering the turnaround of PLDT
and Piltel through a disciplined convergence strategy consisting of
consolidation, diversification and expansion, spearheading PLDT&#146;s emergence as
one of Asia&#146;s most recognized, admired, innovative and best performing
telecommunication companies, spurring investor interest in the Philippines by
bringing First Pacific and other foreign investors into the Philippines, being
an exemplary Filipino capable of effective and ethical leadership and of
competing with the best in the international business community, and for an outstanding
career that spans business, academe, charitable, non-government, arts and
culture, sports and health 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.
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 Piltel.  He is the chairman of the board of Wolfpac
Mobile, Inc., Smart Broadband, Inc. (formerly Meridian Telekoms, Inc.,) I-Contacts
Corporation and the president of ACeS Philippines.  He also holds directorships
in Philippine Telecommunications Investment Corporation and some subsidiaries
of PLDT, namely, ePLDT and Mabuhay Satellite.  His business experience spans
over 30 years and cuts across a broad range of industries, namely, packaging,
bottling, petrochemicals, real estate and, in the last decade,
telecommunications and information technologies.  In November 2004, Mr.
Nazareno was appointed by President Gloria Macapagal-Arroyo as Private Sector
Representative of the Public-Private Sector Task Force for the Development of
Globally Competitive Philippine Service Industries.  He was voted Best Chief
Executive Officer in the Philippines at the 2004 and 2005 Best-Managed
Companies and Corporate Governance Polls conducted by <i>Asiamoney, </i>one of Asia&#146;s most influential magazines.  </p>

<p style='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> is the president and chief executive officer of the
television network ABC-5, the chairman of the Bank of Commerce, Bank of
Commerce Investment Corporation and CAP Life Insurance Corporation.  He is a
member of the Finance Committee of PLDT.  He is a director of C&amp;O
Investment Realty Corporation, Kuok Phil. Properties, Inc. and Philippine
Telecommunications Investment Corporation.  He served as chairman of the board
of PLDT from November 1998 to February 2004 and as president and chief
executive officer of PLDT for over 12 years until November 1998.  </p>

<p style='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. Tameena Resources, Inc., Grepalife Asset Management
Corporation and Grepalife Fixed Income Fund Corporation.  She is also
chairperson of Landev Corporation, Manila Memorial Park, Inc., Mapua
Information Technology Center, Inc., Hi-Eisai Pharmaceuticals, Inc. Universal
Malayan Reinsurance Corporation and Lifetime Plans, 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 EEI Corporation, Pan Malayan Management and
Investment Corp., Petro Energy Resources Corp., Nippon Life Insurance Co.,
South Western Cement Corp., Seafront Resources Corp., Malayan Insurance Co.
Inc., MICO Equities, Inc., Hermoza Ecozone Development Corporation. 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 has been elected
president of the International Social Security Association, an association
based in Geneva, Switzerland, to serve as such for a three-year term commencing
in September 2004.  She is also the chairman of the Finance Committee and an
advisor to the Audit Committee of the board of directors of PLDT.  Until June 30, 2001, she was the senior partner and the chairperson of Joaquin Cunanan &amp;
Co., a member firm of PricewaterhouseCoopers Worldwide.  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 Ionics Inc.  She is also a trustee of several educational and
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.
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 is a director of First Pacific and a Commissioner of P.T.
Indofoods Sakses Makmur Tbk.  He is also the chairman of the Board of Trustees
of the PLDT Beneficial Trust Fund and the Executive Compensation Committee of
the Board of Directors of PLDT.  Mr. del Rosario also sits on the boards of
Infrontier (Philippines) Inc., Philippine Telecommunications Investment
Corporation, Smart Communications Holdings, Inc., LMG Chemicals Corporation,
Pacific Plaza Condominium Corporation, Pacific Plaza Towers Condominium
Corporation and Six Harmonies Holdings, Inc.   </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"><b>Atty.
Ray C. Espinosa</b> is the president of ePLDT, Wolfpac and Philippine Home
Cable Holdings, Inc. He is the chairman of the subsidiaries of ePLDT, namely
Parlance, Vocativ, Ventus, ePDS, Inc., mySecureSign, Inc., iPlus Intelligent
Networks, Inc., Infocom, Sidera Technologies, Inc., Digital Paradise and
netGames, Inc.  He is a member of the boards of BayanTrade Dotcom, Inc., Cyber
Bay Corporation, Nation Broadcasting Corporation, Enterprise Investment
Holdings, Inc, Unilink Communications Corporation and some of its subsidiaries,
Netopia Computer Technologies, Inc., and Stradcom Corporation.  He is
vice-chairman of PLDT Beneficial Trust Fund.  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;line-height:10.0pt' 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.  He is the chairman of the
Audit Committee and a member of the Governance and Nomination Committee of the
board of directors of PLDT.  </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"><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., CADP
Group Corp., Club Punta Fuego, Roxaco Land Corporation, Roxas &amp; Company,
Inc. and Jade Orient Sugar Corp.  He holds directorships in BDO Private Bank, Batangas
Assets Corporation and Hawaiian Philippine Sugar Co.  Mr. Roxas is a trustee
and/or officer of several non-profit organizations.  He serves as a member of
the Audit Committee and Executive Compensation Committee of the Board of
Directors of PLDT. </p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b>Mr. Oscar S. Reyes</b> is the Chairman<b>
</b>of Unicapital Securities, Inc., Actron Industries, Inc. and Link Edge,
Inc.  He serves as a member of the Audit, Governance and Nomination and Executive
Compensation Committees of the Board of Directors of PLDT.  He also holds
directorships in Bank of the Philippine Islands, CEOs, Inc., DMCI Holdings,
Inc., Level Up!, Inc., Manila Water Corporation, Universal Robina Corporation,
Sunlife of Canada (Philippines) and of other private corporations.  He was a
member of the Advisory Board of PLDT for four years until April 2005.  Mr.
Reyes was the Country Chairman of the Shell Companies in the Philippines from 1997 to 2001 and concurrently the Managing Director of Shell Philippines
Exploration B.V. until 2002.  From 2002 to 2004, he served as the Management
Adviser of Shell Philippines Exploration B.V. and as CEO Adviser of Pilipinas
Shell Petroleum Corporation.  </p>

<p style='text-indent:.5in;line-height:10.0pt' 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.
Shigeru Yoshida</b> is a vice president for System Integration and
International Network Service Business of NTT Worldwide Telecommunications
Corporation, or NTT Worldwide.  From 2001 to 2003, he was the vice president of
the Solutions Division and led the strategic planning and project development
of &#147;e-Japan&#148; system integration, a governmental program to enhance Japanese
national IT infrastructure.  He headed the Business Users, Consumers and Office
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.  He is an advisor to the
Audit Committee and Finance Committee and a member of the Executive
Compensation Committee and Governance and Nomination Committee of the Board of
Directors of PLDT.</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"><b>Mr.
Tatsu Kono</b> joined DoCoMo in 2000 in the
position of executive director of the Global Investment Group.  In 2003, Mr.
Kono assumed his present position as Managing Director of DoCoMo&#146;s Corporate
Sales Department, Corporate Marketing Division.  Prior to joining DoCoMo, he
held various positions in Kokusai Denshin Denwa Co., Ltd., from 1989 to 2000.  </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"><b>Ms.
Teresita T. Sy-Coson </b>is the president
of Shoe Mart, Inc., or SM, a company engaged in department store operations and
the executive vice president and director of SM Prime Holdings, Inc., a mall
developer and operator.  She is the executive chairman of Supervalue, Inc., the
chairman of Banco de Oro Universal Bank, the vice chairman of SM Investments
Corporation and a director of First Asia Realty Development Corporation.  She has
worked with the SM Group of Companies for over 30 years.  She is a member of
the Finance Committee and the Governance and Nomination Committee of the Board
of Directors of PLDT.  She also holds directorships in Asia-Pacific Computer
Technology Center, Inc., BDO Capital Insurance Brokers, First Asia Realty
Development Corp. and other private institutions. </p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='line-height:10.0pt !msorm;text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Alfred
Vy Ty</b><b> </b>is the vice chairman of Toyota Motor Philippines
Corporation, the president of Federalland, Inc. and Asia Pacific Top Management
International Resources Corp., the general manager of ASPAC, Shanghai and the
Corporate Secretary of Metropolitan Bank and Trust Corporation.  He is also a
director of Mirant Global Corporation.  He obtained his Bachelor of Science
Degree in Business Administration from the University of Southern California.</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"><b>Atty.
Ma. Lourdes C. Rausa-Chan </b>is senior
vice president for corporate and legal affairs and the general counsel 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 several 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. </b><b>Chua</b> is the treasurer of PLDT and senior vice president for
PLDT&#146;s corporate finance and treasury sector.  She concurrently serves as the chief
financial officer of Smart.  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 work 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, Piltel,
ePLDT and several subsidiaries of ePLDT.  She 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>Mr.
Rene G. Ba&#241;ez </b>is the chief governance
officer of PLDT.  He served as Commissioner of the Philippine Bureau of
Internal Revenue from February 2001 to August 2002.  Prior to that, he was the head
of support services and tax management group of PLDT from January 1999 to
January 2001.  He served as group vice president for tax affairs of Metro
Pacific Corporation for three years until December 1998.  He is a non-voting
member of the Governance and Nomination Committee of the Board of Directors 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.
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.  Prior to his appointment as head of Network Services in February
2003, he served as head of network development and provisioning from February
1999 and as head of marketing from December 1993.  He 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 consumer affairs
effective in December 2005.   He headed the retail business group of PLDT from February
2003 until his appointment as international and carrier business group head in
June 2004.  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 a senior vice president of PLDT 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 resources 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 a director of some subsidiaries of PLDT and is
a non-voting member of the Governance and Nomination Committee of the Board of
Directors 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.
Rosalie R. Montenegro</b> concurrently serves as president of Vocativ, Parlance
and Ventus which are wholly-owned subsidiaries of ePLDT, engaged in the call
center business.  Prior to her appointment as a senior vice president in July
2000, she served as consumer banking head of ABN-AMRO Savings Bank and as 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 holds directorships in some
subsidiaries of PLDT and ePLDT.</p>

<p style='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> was senior vice president for the international and
carrier business group and previously head of the corporate business group of
PLDT.  He is currently the president of PLDT Global Corp.  He has over 15 years
of work 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 and PLDT
Global.</p>

<p style='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 work 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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><b>Mr.
Menardo G. Jimenez, Jr.</b> is senior vice president for the retail business group
of PLDT.  He 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.  His business experience
spans more than 20 years in film and cinema, theater, television advertising,
publishing, broadcasting, education and, recently, in the telecommunications
sector.  In 1998, Mr. Jimenez was given the Ten Outstanding Young Men (TOYM)
Award in Manila for Multi-Media Achievement.  In 1999, he received his Ten
Outstanding Young Persons (TOYP) of the World Award for Cultural Achievement in
 Cannes, France.  He recently won the first CEO (Communications Excellence in
Organizations) Awards given by the International Association of Business
Communicators.</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"><b>Mr.
Jun R. Florencio</b> is the senior vice president for PLDT&#146;s internal audit and
fraud risk management group effective February 16, 2006.  He has over 20 years of work experience in the areas of external and internal audit, credit
management, information technology, financial management and controllership.
He joined the Company in April 1999 and served as the financial reporting and control
head up to March 2000, then as audit and assurance head until February 15,<b> </b>2006
and held various positions in the finance organization of Eastern
Telecommunications and was the financial controller of Smart for four years until
March 1999.</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"><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 a vice president
and the controller 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 or
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.
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.
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:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr.
Rolando G. Pe&#241;a </b>is the head of network
services division of Smart.  He was first
vice president for technical operations group at Digitel, where he worked for
five years prior to his appointment as a director for Smart&#146;s local exchange carrier
services in September 1994.  He held various positions in Eastern
Telecommunications Philippines, Inc. from 1982 until 1989.  He has over 22 years
of experience in telecommunications operations, regional business and technical
and operations support.  He sits in the boards of Smart, Piltel, Wolfpac,
Netopia, Smart Broadband and Mabuhay Satellite.  </p>

<p style='text-indent:.5in;line-height:8.0pt' 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.
Ramoncito S. Fernandez </b>is the head of
administration and materials management
division of Smart.  He is also a member of the
board of directors of Smart, Piltel, I-Contact and Wolfpac.  Until June 2000,
he was the executive vice president in charge of marketing, sales and logistics
of Starpack Philippines Corporation.  He has over 15 years of experience in materials
management, industrial marketing and sales. </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>Mr.
George H. Tan </b>is the senior vice
president - group chief finance officer for ePLDT effective August 16, 2004.  He is in charge of the overall financial management of the ePLDT group
of companies currently comprised of ePLDT, Parlance, Vocativ, Ventus, Infocom,
mySecureSign, iPlus, Digital Paradise, netGames and ePDS. He also has oversight
responsibility over ePLDT's equity investments in Stradcom, Bayantrade and Technology
Support Services, Inc., formerly First Advance Multi-Media Entertainment
Corporation.  He manages the accounting, finance, treasury and administrative
support at ePLDT. He is actively involved in investment analysis and decisions,
cost control and management, product costing and pricing of Vitro products and
services, fund raising activities, financial analysis and business reviews.  Prior
to joining ePLDT in September 2000, Mr. Tan served as an executive vice president
and chief finance officer with William, Gothong &amp; Aboitiz, Inc., the Philippines&#146; largest inter-island shipping company, from 1998 to 1999.</p>

<p style='text-indent:.5in' 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="_Toc75779224"></a><a
name="_Toc46082283">Terms of Office</a></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">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='text-indent:.5in' 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="_Toc75779225"></a><a
name="_Toc46082284">Family
Relationships</a></p>

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

<p style="margin-top:0;margin-bottom:0">None of the directors and
officers of PLDT, except for Eriberto B. Gesalta and Elisa B. Gesalta who are
siblings, has any family relationships up to the fourth civil degree either by
consanguinity or affinity.</p>

<p style='text-indent:.5in;line-height:9.0pt' 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="_Toc75779226"></a><a
name="_Toc46082285">Compensation</a> of Key Management Personnel of the PLDT
Group</p>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">The
aggregate compensation paid to our key officers, directors and advisors named above,
as a group, for 2005 amounted to approximately Php299 million.  </p>

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

<p style="margin-top:0;margin-bottom:0">There are no agreements between
PLDT Group and any of its directors and key officers and 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='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Long-term
Incentive Plan</p>

<p style='page-break-after:avoid;punctuation-wrap:hanging;
text-autospace:ideograph-numeric ideograph-other;border:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On August 3, 2004, the Board of Directors approved the establishment of
the Long Term Incentive Plan, or LTIP, covering a four-year period of
performance commencing on January 1, 2004 and ending on December 31, 2007, or the Performance Cycle.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The LTIP is a cash plan that is intended to provide meaningful,
contingent, financial incentive compensation for eligible executives, officers
and advisors of the PLDT and its subsidiaries, who are consistent performers
and contributors to the achievement of the long-term strategic plans and
objectives, as well as the functional strategy and goals of the PLDT Group.</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">Payment of awards under the LTIP is contingent upon the achievement of
the PLDT common share price target and cumulative consolidated net profit
target of the PLDT Group by the end of the Performance Cycle, as approved by
the Board of Directors.</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">If the share price and profit objectives are met, the cost of the LTIP,
before taxation, for the four-year Performance Cycle will be approximately
Php3.6 billion, which amount will represent less than 3% of the cumulative
consolidated net profit target for the Performance Cycle.</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">The LTIP is administered by the Executive Compensation Committee which
has the authority to determine (a) eligibility and identity of participants;
(b) the award attributable to each participant based on the participant&#146;s
annual base compensation and taking into account such participant&#146;s seniority,
responsibility level, performance potential, tenure with the PLDT Group, job
difficulty and such other measures as the Committee deems appropriate; (c) the
level of achievement of the performance objectives; and (d) the actual award
payable to each participant based on the level of achievement of the
performance objectives.</p>

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

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779227"></a><a name="_Toc46082286">Executive Stock Option Plan</a></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">On April 27, 1999 and December 10, 1999, the board of directors and
stockholders, 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 stock to subscribe for any issue of the
1,289,745 shares of common stock pursuant to the executive stock option plan.</p>

<p style='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 that were granted pursuant to the executive stock option
plan to management executives and advisors/consultants of PLDT became fully
vested on December 10, 2004.  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 exercise period is until December 9, 2009.  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='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:0in;line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a
name="OLE_LINK9"></a><a name="OLE_LINK8"></a><a name="_Toc75779228"></a><a
name="_Toc46082287"><b>Share Ownership</b></a><b> </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"><a
name="OLE_LINK34"></a><a name="OLE_LINK33">The
following table sets forth information regarding ownership of our common stock,
preferred stock and executive stock options as at </a>May 31, 2006 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='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:93.78%;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%;
 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%;
 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%;
 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%;
 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%;
 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%;
 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%;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Stock
 Options</b><b>(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%' 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%' 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%' 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%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
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 <tr style='page-break-inside:avoid;height:9.35pt'>
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 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' 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;height:9.35pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">211,779</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">360</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
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 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,055<b>(2)</b></p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Corazon S. de la Paz</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">12,125,010<b>(3)</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:
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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">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Albert F. del Rosario</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">100,025</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">1,560</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">11,201</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:
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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">22,042</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Tatsu Kono</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;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">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">1,188<b>(4)</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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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 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
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 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Oscar S. Reyes</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
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 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
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 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">540</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
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 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">1,060</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
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 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
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 line-height:12.0pt;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;height:9.35pt'>
 <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:
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 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
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 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
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 <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">577</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
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 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <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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 <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:#D9D9D9;padding:
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 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">540</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">George N. Lim</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:
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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">360</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">9,256</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Claro Carmelo P. Ramirez</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">5,996</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;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">10,000</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Victorico P. Vargas </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">3,000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <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">2,878</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Rosalie R. Montenegro </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;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">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Alfredo S. Panlilio </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Ernesto R. Alberto</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;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">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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:
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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">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Jun R. Florencio</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">15</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">1,788</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Celso T. Dimarucut</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">1,500</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">11,518</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Florentino D. Mabasa, Jr.</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;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">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt' style='page-break-inside:
 avoid !msorm;height:9.35pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Eriberto B. Gesalta</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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">1,302</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Ramon B. Rivera, Jr.</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">6,817</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt' style='page-break-inside:
 avoid !msorm;height:9.35pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Emiliano R. Tanchico, Jr.</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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">1,539</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Ricardo M. Sison</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">200</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">5,700</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt' style='page-break-inside:
 avoid !msorm;height:9.35pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Miguela F. Villanueva</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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:
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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">&#150;</p>
 </td>
 <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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
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 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Cesar M. Enriquez</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;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">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt' style='page-break-inside:
 avoid !msorm;height:9.35pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Raymond S. Relucio</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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:
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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">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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">2,552</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Richard N. Ferrer</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">3,680</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt' style='page-break-inside:
 avoid !msorm;height:9.35pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Nerissa S. Ramos</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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">1,588</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Ramon Alger P. Obias</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">2,531</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt' style='page-break-inside:
 avoid !msorm;height:9.35pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Alfredo B. Carrera</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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">350</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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 0in 5.5pt 0in 5.5pt !msorm;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">55,313(5)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='margin-right:14.45pt;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Rolando G. Pe&#241;a</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Ramoncito S. Fernandez</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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">120</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <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;height:9.35pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">George H. Tan</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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;height:9.35pt'>
 <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:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt;height:9.35pt'>
 <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:
2.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>As at May 31, 2006, under PLDT&#146;s ESOP, options to purchase 88,079</i> <i>shares of common stock for the key officers listed in
the table above remain unexercised.  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.  All outstanding options were fully vested as at December 10, 2004. </i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(2)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Includes 21,957 PLDT common
shares registered in the name of Hydee Management and Resources, Inc.  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 these shares.</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(3)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Includes 5,024,789 PLDT
common shares registered in the name of Social Security System and<b> </b>7,100,220<b>
</b>PLDT common shares held of record by PCD Nominee Corporation.  Ms. De la
Paz, as president and chief executive officer of the Social Security System,
may exercise voting rights in respect of these shares and may be considered to
have beneficial ownership of these shares. </i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(4)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Includes 386 shares of PLDT&#146;s
common stock registered in the name of Ateneo de Manila University and 800 shares
of PLDT&#146;s common stock held of record by PCD Nominee Corporation.  As President
of the Ateneo de Manila University, Rev. Fr. Nebres may exercise voting rights
in respect of these shares and may be considered to have beneficial ownership
of these shares</i>.</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(5)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>The total PLDT common shares
have been lodged with the Philippine Central Depository, Inc.</i></p>

<p style='text-indent:.5in;line-height:10.0pt' 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">The
aggregate number of common and preferred shares directly and indirectly owned
by directors, key officers and advisors listed above as at May 31, 2006 were 12,556,588
and 12,105, respectively, or 6.905189%  and 0.001694% of PLDT&#146;s outstanding common
and preferred shares, respectively. </p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Board of Directors</p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">At least four of our directors,
namely, Rev. Fr. Bienvenido F. Nebres, S.J., Oscar S. Reyes, Pedro E. Roxas and
Alfred Vy Ty, are independent directors who are not officers or employees of
PLDT or any of its subsidiaries, and are free from any business or other
relationship with PLDT or any of its subsidiaries which could, or could
reasonably be perceived to, materially interfere with the exercise of
independent judgment in carrying out their responsibilities as directors.  The independence standards/criteria are provided in our
By-Laws and Manual on Corporate Governance pursuant to which, in general, a
director may not be deemed independent if such director 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='text-indent:.5in !msorm;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='line-height:10.0pt !msorm;page-break-after:auto !msorm;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">Mr. Alfred Vy
Ty was elected at the annual
meeting of shareholders held on June 13, 2006 as
independent director in lieu of Ms. Teresita T. Sy-Coson who was not seeking re-election in order to focus on her various
duties under the SM Group of Companies.  All other directors were
re-elected at such annual meeting of shareholders.</p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779229"></a><a
name="_Toc46082288">Audit, Governance
and Nomination, Executive Compensation and Finance Committees</a></p>

<p style='text-indent:.5in;line-height:10.0pt' 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, governance and
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;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0"><i>Audit
Committee</i></p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our audit committee is composed
of three members all of whom are independent directors, namely, <br>
Fr. Bienvenido F. Nebres, S.J., who chairs the committee, Mr. Pedro E. Roxas
and Mr. Oscar S. Reyes.  Mr. Shigeru Yoshida and Ms. Corazon S. de la Paz, who are
non-independent members of our board of directors and Mr. Roberto R. Romulo
serve as advisors to the audit committee.  All of the members of our audit
committee are financially literate and Ms. Corazon de la Paz 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;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;
in its oversight of PLDT&#146;s
accounting and financial reporting principles and policies and internal audit
controls and procedures;</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;
in its oversight of the integrity
of PLDT&#146;s financial statements and the independent audit thereof;</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;
in its oversight of PLDT&#146;s
compliance with legal and regulatory requirements; </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;
in its oversight of the external
auditor&#146;s qualifications and independence; 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;
in its oversight of the
performance of the internal auditing organization and the external auditors.</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">To
carry its direct responsibility for the appointment, setting of compensation,
retention and removal of the external auditors, the audit committee has the
following duties and powers:</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;
to review and evaluate the
qualifications, performance and independence of the external auditors and the lead
partner of the external auditors;</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;
to select and appoint the external
auditors and to remove or replace the external auditors;</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;
to review and approve 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='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;
to pre-approve all audit and
non-audit services to be provided by and all fees to be paid to the external
auditors;</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;
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='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;
to ensure that the external
auditors or the lead partner of the external auditors is rotated at least once
every five (5) years; </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;
to have separate sessions
periodically, with management, with the internal audit organization and with
the external auditors, where deemed appropriate, to surface issues warranting
the attention of the audit committee; 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;
to resolve disagreements between
management and the external auditors regarding financial reporting. </p>

<p style='text-indent:.5in;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">The
audit committee also has the authority to retain or obtain advice from special
counsel or other experts or consultants in the discharge of their
responsibilities without the need for board approval.</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>Governance and 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 governance and nomination committee is composed of
five voting and two non-voting members.  Three of the voting members are
independent directors namely, Fr. Bienvenido F. Nebres, S.J., Mr. Alfred Vy Ty and
<br>
Mr. Oscar S. Reyes.  Mr. Alfred Vy Ty replaced Ms. Teresita Sy-Coson, following
his election as independent director at the annual shareholders meeting held on
June 13, 2006.  Mr. Manuel V. Pangilinan who serves as chairman and Mr. Shigeru
Yoshida are the other voting members and Mr. Victorico P. Vargas and Mr. Rene
G. Ba&#241;ez are the non-voting members. </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
principal functions and responsibilities of our governance and nomination committee
are:</p>

<p style='text-indent:.5in;line-height:6.0pt;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">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To develop and recommend to the board
for approval and oversee the implementation of corporate governance principles
and policies;</p>

<p style='text-indent:.5in;line-height:6.0pt;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">2.&nbsp;&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='text-indent:.5in;line-height:6.0pt;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">3.&nbsp;&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='text-indent:.5in;line-height:6.0pt;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">4.&nbsp;&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 five members, all of whom are regular members of our
board of directors.  Three of these five members are independent directors,
namely Mr. Pedro E. Roxas, <br>
Mr. Oscar S. Reyes and Mr. Alfred Vy Ty, and two are non-independent directors,
namely Mr. Albert F. del Rosario, who is chairman of the executive compensation
committee, and Mr. Shigeru Yoshida.  Mr. Alfred Vy Ty replaced <br>
Ms. Teresita Sy-Coson, following his election as independent director at the
annual shareholders meeting held on June 13, 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">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;&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='text-indent:.5in;line-height:6.0pt;page-break-after:
avoid' 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;&nbsp;
To oversee the development and
administration of our compensation programs; and</p>

<p style='text-indent:.5in;line-height:6.0pt;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">3.&nbsp;&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='margin-bottom:0in;margin-bottom:.0001pt' 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.  Ms. Corazon S. de la Paz, who chairs the
committee, Mr. Antonio O. Cojuangco and Mr. Alfred Vy Ty are regular members of
our board of directors.  Mr. Alfred Vy Ty replaced Ms. Teresita Sy-Coson,
following his election as independent director at the annual shareholders
meeting held on June 13, 2006.  Mr. Christopher H. Young, our chief financial
advisor and Mr. Amado S. Bagatsing comprise the fourth and fifth members.  Mr.
Shigeru Yoshida, who is a non-independent member of our board of directors,
serves as an advisor to the committee.</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
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='page-break-after:auto' style="margin-top:0;margin-bottom:0">Directors&#146; Involvement in Legal
Proceedings</p>

<p style='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 chairman,
Mr. Manuel V. 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.  </p>

<p style='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 his 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.  In
a Joint Resolution dated June 7, 2004, the City Prosecution Office of Makati
dismissed all charges in the Estafa case against Mr. Pangilinan.</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">On
 November 16, 2004, ULCI, through Messrs. Tuason and Merin, filed with the DOJ a
Petition for Review dated November 6, 2004 contesting the Resolution of the
City Prosecution Office.  Thereafter, complainants and respondents including
Mr. Pangilinan filed a <i>Joint Motion to Dismiss</i> (with prejudice) the
charges and counter-charges subject to the investigation before the DOJ which
Motion is currently pending.</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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">As
of December 31, 2005, we had 18,926 employees within the PLDT Group.  PLDT had
9,013 employees at the end of 2005, of which 46% were rank-and-file employees,
50% were management/supervisory staff and 4% were executives.  This number
represents a decrease of 463 employees, or approximately 5%, from the staff
level as of the end of 2004, mainly as a result of the ongoing manpower
rightsizing program.  From a peak of 20,312 at the end of 1994, PLDT&#146;s number
of employees has declined by 11,299, or 56%, by the end of 2005.  As of December 31, 2004, we had 18,433 and 9,476 employees under the PLDT Group and PLDT,
respectively. </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
has three employee unions, the members of which in aggregate represent 38% 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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><a
name="OLE_LINK24"></a><a name="OLE_LINK23">On March 8, 2005, PLDT and PLDT
Sales Supervisors&#146; Union, or PSSU, concluded and signed a new three-year
Collective Bargaining Agreement, or CBA, covering the period from January 1,
2005 to December 31, 2007.  This CBA provides 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 are improvements of existing benefits and a
one-time signing bonus of Php33,000, including a Php3,000 goodwill bonus, for
each member of PSSU.  Furthermore, a Php4,000 one-time clothing accessory
allowance was also provided.</a></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">On January 20, 2005, 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 covering the period from January 1, 2005 to December 31, 2007.
This CBA provides each member monthly salary increases of 8% of basic pay or
Php2,000, whichever is higher, for 2005; 10% of basic pay or Php2,700,
whichever is higher, for 2006; and another 10% of basic pay or Php2,400,
whichever is higher, for 2007.  Other highlights of this CBA are improvements
of existing benefits and a one-time signing bonus of Php33,000, including a
Php3,000 goodwill bonus, 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 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 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">In connection with the separation from service in 2002 of 322 employees
who were engaged in operator-assisted call-handling units, due to redundancies,
MKP brought an unfair labor practice case before the National Labor Relations
Commission, or NLRC, assailing the legality of the implemented redundancy.  On October 28, 2005, the NLRC dismissed the unfair
labor practice case ruling in favor of the validity of the redundancy.</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='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Defined Benefit Plans</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">We have defined benefit pension plans, covering substantially all of
our employees, except Smart&#146;s, which require contributions to be made to a separate
administrative fund.</p>

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

<p style='text-indent:.5in' 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 resignation with
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="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%.  Early
retirement benefit is equal to the accrued normal retirement benefit based on
salary and service at the date of early retirement.</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
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='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">For
more information about the benefit plan, see <i>Note 17 &#150; Employee Benefits </i>to
the accompanying consolidated financial statements in Item 18.</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"><a name="OLE_LINK32"></a><a
name="OLE_LINK31"></a><a name="_Toc75779234"></a><a name="_Toc46082293">Item 7.        Major Shareholders and Related Party
Transactions</a></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">The following table sets forth information regarding
ownership of shares of PLDT&#146;s common stock as at May 31, 2006 of all
shareholders known to us to beneficially own 5% or more of PLDT shares of
common stock.  All shares of PLDT's common stock have one vote per share.  </p>

<p style='margin-bottom:6.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0  style='width:482.5pt;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:1.6pt'>
 <p align=center style='margin-bottom:0in;margin-bottom:
 .0001pt;text-align:center;line-height:94%;page-break-after:avoid;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Name
 of Beneficial Owner</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 style='line-height:94%;page-break-after:avoid;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Name
 and Address of Record Owner and Relationship with Issuer</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 style='line-height:94%;page-break-after:avoid;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Citizenship</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 style='line-height:94%;page-break-after:avoid;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Title
 of Class</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:94%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Number of Shares Held</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:94%;
 page-break-after:avoid;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='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 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 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 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 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 style='line-height:94%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.05pt'>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:10.05pt'>
 <p align=left style='margin:0in;margin-bottom:.0001pt;
 text-align:left;line-height:93%' style="margin-top:0;margin-bottom:0">First Pacific(3)</p>
 </td>
 <td  rowspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:10.05pt'>
 <p align=left style='text-align:left;line-height:93%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Philippine Telecommunications Investment Corp.(1)<br>
 12/F Ramon Cojuangco</p>
 </td>
 <td  rowspan=2 valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:10.05pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Philippine </p>
 </td>
 <td  rowspan=2 valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:10.05pt'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Common</p>
 </td>
 <td  rowspan=2 valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:10.05pt'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">26,034,263</p>
 </td>
 <td  rowspan=2 valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:10.05pt'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14.32</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.05pt'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:10.05pt'>
 <p align=left style='margin:0in;margin-bottom:.0001pt;
 text-align:left;line-height:93%' style="margin-top:0;margin-bottom:0">24/F Two Exchange Square <br>
 8 Connaught Place, Central, </p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Hong Kong</p>
 </td>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Building, Makati Avenue, Makati City </p>
 </td>
 <td  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">Corporation</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%;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 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;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 style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%;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 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:93%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Metro Pacific Resources, Inc.(2)</p>
 </td>
 <td  valign=bottom 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">Philippine
 </p>
 </td>
 <td  valign=bottom 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">Common</p>
 </td>
 <td  valign=bottom 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">17,112,534</p>
 </td>
 <td  valign=bottom 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">9.41</p>
 </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:93%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">c/o Corporate Secretary</p>
 </td>
 <td  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">Corporation</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%;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 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">18th Floor Liberty Center </p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </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:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">104 H.V. Dela Costa St.</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </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:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">Salcedo Village, Makati City</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </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:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=left style='margin:0in;margin-bottom:.0001pt;
 text-align:left;line-height:93%;page-break-after:auto' style="margin-top:0;margin-bottom:0">PCD
 Nominee Corporation(4)</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">See Footnote 4 below</p>
 </td>
 <td  valign=bottom 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">Philippine</p>
 </td>
 <td  valign=bottom 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">Common</p>
 </td>
 <td  valign=bottom 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">72,125,189</p>
 </td>
 <td  valign=bottom 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">39.66</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">G/F MSE Building</p>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">6767 Ayala Avenue, Makati City</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='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=center style='text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0">Corporation</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </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:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.45pt' style='page-break-inside:
 avoid !msorm'>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;
 height:9.45pt'>
 <p style='text-align:justify !msorm;line-height:93%' style="margin-top:0;margin-bottom:0">FMR Corp.(5)</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;
 height:9.45pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">See Footnote 5 below</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;
 height:9.45pt'>
 <p align=center style='text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0">U.S.</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;
 height:9.45pt'>
 <p align=center style='text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0">Common</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;
 height:9.45pt'>
 <p align=center style='text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0">9,100,890</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm;
 height:9.45pt'>
 <p align=center style='text-align:left !msorm;line-height:
 94% !msorm;text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0">5.00</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='text-align:justify !msorm;line-height:93%' style="margin-top:0;margin-bottom:0">82 Devonshire Street</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='text-align:center !msorm;line-height:93%' style="margin-top:0;margin-bottom:0">Corporation</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='text-align:center !msorm;line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='text-align:center !msorm;line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='line-height:94%' 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=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='text-align:justify !msorm;line-height:93%' style="margin-top:0;margin-bottom:0">Boston, Massachusetts 02109</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='text-align:center !msorm;line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='text-align:center !msorm;line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='text-align:center !msorm;line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt 0in 5.5pt 0in 5.5pt !msorm'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=left style='margin:0in;margin-bottom:.0001pt;
 text-align:left;line-height:93%;page-break-after:auto' style="margin-top:0;margin-bottom:0">NTT
 Communications(6)</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">Same as Record Owner</p>
 </td>
 <td  valign=bottom 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">Japanese </p>
 </td>
 <td  valign=bottom 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">Common</p>
 </td>
 <td  valign=bottom 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">12,633,487</p>
 </td>
 <td  valign=bottom 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">6.95</p>
 </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:93%' style="margin-top:0;margin-bottom:0">1-1-6 Uchisaiwai-Cho</p>
 <p style='text-align:justify;line-height:93%' style="margin-top:0;margin-bottom:0">I-Chome, Chiyoda-ku</p>
 <p style='text-align:justify;line-height:93%' style="margin-top:0;margin-bottom:0">Tokyo 100-8019, Japan</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='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=center style='text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0">Corporation</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:93%;
 page-break-after:auto' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:93%;
 page-break-after:auto' style="margin-top:0;margin-bottom:0">NTT DoCoMo, Inc.(7)</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">Same as Record Owner</p>
 </td>
 <td  valign=bottom 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">Japanese </p>
 </td>
 <td  valign=bottom 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">Common</p>
 </td>
 <td  valign=bottom 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">12,633,486</p>
 </td>
 <td  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">6.95</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:93%;
 page-break-after:auto' style="margin-top:0;margin-bottom:0">41st Floor, Sanno Park Tower</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='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=center style='text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0">Corporation</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:93%;
 page-break-after:auto' style="margin-top:0;margin-bottom:0">2-11-1 Nagata-cho</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:93%;
 page-break-after:auto' style="margin-top:0;margin-bottom:0">Chiyoda-ku, Tokyo 100-6150</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:93%;
 page-break-after:auto' style="margin-top:0;margin-bottom:0">Japan</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:93%;
 page-break-after:auto' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=left style='margin:0in;margin-bottom:.0001pt;
 text-align:left;line-height:93%;page-break-after:auto' style="margin-top:0;margin-bottom:0">J. P.
 Morgan (Hong Kong) Nominees Limited(8)</p>
 </td>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">See Footnote 8 below</p>
 </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">HongKong<br>
 Corporation</p>
 </td>
 <td  valign=bottom 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">Common</p>
 </td>
 <td  valign=bottom 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">29,921,268</p>
 </td>
 <td  valign=bottom 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">16.45</p>
 </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:93%' style="margin-top:0;margin-bottom:0">20/F Chater House </p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">8 Connaught Place, Central, Hong Kong</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </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:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">Social Security System(9)</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">Same as Record Owner</p>
 </td>
 <td  valign=bottom 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">Philippine</p>
 </td>
 <td  valign=bottom 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">Common</p>
 </td>
 <td  valign=bottom 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">12,125,009</p>
 </td>
 <td  valign=bottom 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">6.67</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">East Avenue, Diliman, Quezon City</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='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=center style='text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0">Corporation</p>
 </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">&nbsp;</p>
 </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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=left style='margin:0in;margin-bottom:.0001pt;
 text-align:left;line-height:93%;page-break-after:auto' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  valign=bottom 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">&nbsp;</p>
 </td>
 <td  style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-bottom:6.0pt' style="margin-top:0;margin-bottom:0"><u>                                </u></p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:
0in;margin-left:.5in;margin-bottom:.0001pt;line-height:10.0pt' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Pursuant to a resolution
adopted by the Board of Directors of Philippine Telecommunications Investment
Corporation, or 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 stockholders 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 stockholders of the corporation issuing such shares
of stock or voting securities.</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:4.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-top:0in;margin-right:0in;
margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(2)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Based on the resolutions of
the Board of Directors of Metro Pacific Resources, Inc., or MPRI, copies of
which had been furnished to PLDT, Mr. Manuel V. Pangilinan has been appointed
as proxy or duly authorized representative of MPRI to represent and vote the
PLDT common shares of MPRI in the Annual Meeting of Stockholders of PLDT.</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:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(3)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>First Pacific has a 24.76%
economic interest and 31.36% voting interest in PLDT based on the PLDT common
shareholdings of the intermediate holding companies PTIC, MPRI, Larouge B.V.
(which holds 8,479,805 shares of PLDT common stock lodged with the Philippine
Depository and Trust Co.) and Semilion Enterprises, Inc. (which holds ADRs
evidencing ADSs representing 5,408,346 shares of PLDT common stock).</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:4.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:
0in;margin-left:.5in;margin-bottom:.0001pt;line-height:10.0pt' style="margin-top:0;margin-bottom:0"><i>(4)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Registered owner of shares
held by participants in the Philippine Depositary and Trust, Co., or PDTC, a
private company organized to implement an automated book entry system of
handling securities transactions in the Philippines.  Under the PDTC
procedures, when an issuer of a PDTC-eligible issue will hold a stockholders&#146;
meeting, the PDTC shall execute a pro-forma proxy in favor of its participants
for the total number of shares in their respective principal securities account
as well as for the total number of shares in their client securities account.
For the shares held in the principal securities account, the participant
concerned is appointed as proxy with full voting rights and powers as
registered owner of such shares.  For the shares held in the client securities
account, the participant concerned is appointed as proxy, with the obligation
to constitute a sub-proxy in favor of its clients with full voting and other
rights for the number of shares beneficially owned by such clients.  Based on
the information provided by PDTC to PLDT, none of the owners of the PLDT common
shares registered under the name of PCD Nominee Corporation, or PCD, owns more
than 5% of PLDT&#146;s outstanding common stock as at May 31, 2006, except The
Hongkong and Shanghai Banking Corporation, or HSBC, and Standard Chartered Bank
which own approximately 18.81% and 5.88%, respectively, of PLDT&#146;s outstanding
common stock as at May 31, 2006.  The Company has no knowledge if any
beneficial owner of the shares under the HSBC Clients account and Standard
Chartered Bank own more than 5% of PLDT&#146;s outstanding common stock as at May 31,
2006.</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:4.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></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"><i>PCD account also includes 7,100,220 shares beneficially
owned by the Social Security System, 8,479,805 shares beneficially owned by
Larouge B.V., and
9,100,890 shares
beneficially owned by FMR Corp., or FMR.  Please refer to footnotes 3, 5
and 9.</i></p>

<p style='margin-left:.5in !msorm;text-indent:0in !msorm;
line-height:normal !msorm;margin-bottom:0in;margin-bottom:.0001pt;line-height:
4.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:0in !msorm;margin-top:0in;
margin-right:0in;margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(5)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>According to the Schedule 13G of FMR filed with the
Securities and Exchange Commission on February 14, 2006, FMR,</i><i> through subsidiaries, beneficially owned 9,847,130
shares of PLDT&#146;s common stock as of December 31, 2005. </i><i> According
to this Schedule 13G, some or all of these shares of PLDT&#146;s common stock may
include shares of common stock represented by ADSs.  According to subsequent
filings of FMR with the Philippine SEC, FMR, through subsidiaries, beneficially
owned 9,100,890 shares of PLDT&#146;s common stock as of June 16, 2006.</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:4.0pt' 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' style="margin-top:0;margin-bottom:0"><i>(6)&nbsp;&nbsp;&nbsp;&nbsp; </i><i>Based on publicly available information, NTT
Communications is a wholly-owned subsidiary of NTT.  Based on a certification
signed by a duly authorized officer of NTT Communications, a copy of which had
been furnished to PLDT, Mr. Kenji Sato is authorized to execute for and on
behalf of NTT Communications, endorsements, transfers and other matters
relating to the PLDT shares of common stock held by NTT Communications.  On March 14, 2006, NTT Communications transferred to DoCoMo approximately 12.6 million shares
of PLDT&#146;s common stock, representing approximately 7% of PLDT&#146;s outstanding
shares of common stock, pursuant to the Stock Sale and Purchase Agreement dated
 January 31, 2006 between NTT Communications and DoCoMo.</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:4.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:
0in;margin-left:.5in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(7)&nbsp;&nbsp;&nbsp;&nbsp; </i><i>DoCoMo completed the acquisition of 12,633,486 shares
of PLDT common stock from NTT Communications on March 14, 2006.  Based on publicly
available information, DoCoMo is a majority-owned and publicly traded
subsidiary of NTT.  <a name="OLE_LINK36"></a><a name="OLE_LINK35">Based on a
certification signed by a duly authorized officer of DoCoMo, a copy of which
had been furnished to PLDT, Mr. Toshinari Kunieda or Mr. Matsuo Yamamoto, is
authorized to execute for and on behalf of DoCoMo, endorsements, transfers and
other matters relating to the PLDT shares of common stock held by DoCoMo. </a></i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:4.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:
0in;margin-left:.5in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(8)&nbsp;&nbsp;&nbsp;&nbsp; </i><i>Holds shares as nominee of JPMorgan Chase Bank,
successor depositary under the Common Stock Deposit Agreement, dated October
14, 1994, as amended on February 10, 2003, between JPMorgan Chase Bank and the
holders of ADRs evidencing ADSs representing shares of common stock of the
Company (the &#147;Deposit Agreement.&#148;)  Under the Deposit Agreement, 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.  This account includes shares
underlying the ADSs beneficially owned by FMR.  This also includes 5,408,346
shares of common stock underlying the ADSs owned by Semilion Enterprises, Inc.
Please refer to footnote 3. </i></p>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:
0in;margin-left:.5in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(9)&nbsp;&nbsp;&nbsp;&nbsp; </i><i>Consists of 5,024,789 shares registered in the name of
the Social Security System and 7,100,220 shares held of record by PCD Nominee
Corporation.  Ms. Corazon S. de la Paz, as President and Chief Executive
Officer of the Social Security System, may exercise the voting rights in respect
of these shares.</i></p>

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

<p style="margin-top:0;margin-bottom:0">As at May 31, 2006, approximately
86.31% 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-top:0;margin-bottom:0"><i>Cooperation Agreement with
the FP Parties, NTT Communications and DoCoMo</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 the transfer by NTT Communications of approximately 12.6
million shares of PLDT&#146;s common stock to DoCoMo pursuant to the Stock Sale and
Purchase Agreement dated January 31, 2006 between NTT Communications and
DoCoMo, the FP Parties, NTT Communications and DoCoMo entered into a
Cooperation Agreement, dated January 31, 2006.  Under the Cooperation
Agreement, the relevant parties extended certain rights of NTT Communications
thereunder to DoCoMo, including:</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;
certain contractual veto rights over
a number of major decisions or transactions, as set forth above under &#147;Item 3.
Key Information &#150; Risk Factors &#150; Risks Relating to Us &#150; A significant number of
PLDT&#146;s shares are held by three separate shareholders, which may not act in the
interests of other shareholders or stakeholders in PLDT&#148;; and</p>

<p style='margin-left:.75in' 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;
rights relating to the
representation on the board of directors of PLDT and Smart, respectively, and
any committees thereof, as described above under &#147;Item 6. Directors, Senior
Management and Employees &#150; Directors, Key Officers and Advisors&#148;.</p>

<p style='margin-left:.75in' 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">Moreover, key provisions of the
Cooperation Agreement pertain to, among other things:</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' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Restriction on Ownership of
Shares of PLDT by NTT Communications and DoCoMo. </i> Each of NTT Communications and DoCoMo have agreed not
to beneficially own, directly or indirectly, in the aggregate with their
respective subsidiaries and affiliates, more than 21% of then issued and
outstanding shares of PLDT&#146;s common stock.  If such event does occur, the FP
Parties, as long as they own in the aggregate not less than 21% of then issued
and outstanding shares of PLDT&#146;s common stock, have the right to terminate
their respective rights and obligations under the Cooperation Agreement, the
Shareholders Agreement and the Stock
Purchase and Strategic Investment Agreement.</p>

<p style='margin-left:.75in' 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>Limitation on Competition.</i>  NTT Communications, DoCoMo and their respective
subsidiaries are prohibited from investing in excess of certain thresholds in
businesses competing with PLDT in respect of customers principally located in
the Philippines and from using their assets in the Philippines in such
businesses. Moreover, if PLDT, Smart or any of Smart&#146;s subsidiaries intends to
enter into any contractual arrangement relating to certain competing
businesses, PLDT is required to provide, or to use reasonable efforts to
procure that Smart or any of Smart&#146;s subsidiaries provide NTT Communications
and DoCoMo with the same opportunity to enter into such agreement with PLDT or
Smart or Smart&#146;s subsidiaries, as the case may be.  </p>

<p style='margin-left:.75in' 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>Business Cooperation.</i>  PLDT and DoCoMo agreed in principle to collaborate
with each other on the business development, roll-out and use of a W-CDMA
mobile communication network.  In addition, PLDT agreed, to the extent of the
power conferred by its direct or indirect shareholding in Smart, to procure
that Smart will (i) become a member of a strategic alliance group for
international roaming and corporate sales and services and (ii) enter into a
business relationship concerning preferred roaming and inter-operator tariff
discount with DoCoMo.  </p>

<p style='margin-left:.75in' 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>Additional Rights of DoCoMo. </i> Upon NTT Communications, DoCoMo and their
subsidiaries owning in the aggregate 20% or more of the shares of PLDT&#146;s common
stock and for as long as NTT Communications, DoCoMo and their subsidiaries
continue to own in the aggregate 17.5% of the shares of PLDT&#146;s common stock
then outstanding, DoCoMo will be entitled to certain additional rights under
the Cooperation Agreement.</p>

<p style='margin-left:.75in' 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>Change in Control.</i>  Each of NTT
Communications, DoCoMo and the FP Parties agreed that to the extent permissible
under applicable laws and regulations of the Philippines and other
jurisdictions, subject to certain conditions, to cast its vote as a shareholder
in support of any resolution proposed by the board of directors of PLDT for the
purpose of safeguarding PLDT from any Hostile Transferee.  A &quot;Hostile
Transferee&quot; is defined under the Cooperation Agreement to mean any person
(other than NTTC, DoCoMo, First Pacific or any of their respective affiliates)
determined to be so by the PLDT board of directors and includes, without
limitation, a person who announces an intention to acquire, seeking to acquire
or acquires 30% or more of PLDT common shares then issued and outstanding from
time-to-time or having (by itself or together with itself) acquired 30% or more
of the PLDT common shares announces an intention to acquire, seeking to acquire
or acquires a further 2% of such PLDT common shares (a) at a price per share
which is less than the fair market value as determined by the board of
directors of PLDT as advised by a professional financial advisor, (b) which is
subject to conditions which are subjective or which could not reasonably be
satisfied, (c) without making an offer for all PLDT common shares not held by
it and/or its affiliates and/or persons who, pursuant to an agreement or
understanding (whether formal or informal), actively cooperate to obtain or
consolidate control over PLDT, (d) whose offer for the PLDT common shares is
unlikely to succeed or (e) whose intention is otherwise not bona fide; provided
that, no person will be deemed a Hostile Transferee unless prior to making such
determination, the board of directors of PLDT has used reasonable efforts to
discuss with NTT Communications and DoCoMo in good faith whether such person
should be considered a Hostile Transferee.  For
information as to certain provisions of PLDT&#146;s Amended By-Laws that may have the effect of preventing a change in
control of PLDT, see &#147;Item 10. Additional Information &#150; Articles of Incorporations and By-Laws &#150; Change of
Control&#148;.</p>

<p style='margin-left:.75in' 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>Termination.</i>  If NTT Communications, DoCoMo or their respective
subsidiaries cease to own, in the aggregate, full legal and beneficial title to
at least 10% of the shares of PLDT&#146;s common stock then issued and outstanding,
their respective rights and obligations under the Cooperation Agreement and the
Shareholders Agreement will terminate and the Strategic Arrangements (as
defined in the Stock Purchase and Strategic Investment Agreement) will
terminate.  If the FP Parties and their respective subsidiaries cease to have,
directly or indirectly, effective voting power in respect of shares of PLDT&#146;s
common stock representing at least 18.5% of the shares of PLDT&#146;s common stock
then issued and outstanding, their respective rights and obligations under the
Cooperation Agreement, the Stock Purchase and Strategic Investment Agreement,
and the Shareholders Agreement will terminate.</p>

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

<p style="margin-top:0;margin-bottom:0"><i>Integrated i-mode Services
Package Agreement between DoCoMo and Smart</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
Integrated i-mode Service Package Agreement was entered into by Smart and
DoCoMo on February 15, 2006, under which DoCoMo agreed to grant Smart, on an
exclusive basis within the territory of the Philippines for a period of five
years, an integrated i-mode service package including non-transferable license
to use the licensed materials and the i-mode brand, as well as implementation
support and assistance and post-commercial launch support from DoCoMo.  Pursuant
to this agreement, Smart is required to pay an initial license fee and running
royalty fees based on the revenue arising from i-mode subscription fees and
data 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"><i>Other 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='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 March 31, 2003 and March 31, 2005, under which NTT Communications provides PLDT with technical, marketing and other consulting
services for various business areas of PLDT starting April 1, 2000.  Under the
Cooperation Agreement, PLDT agreed to use reasonable efforts to procure that,
with respect to the Advisory Services Agreement, PLDT and Smart, will receive
at a minimum the specified aggregate number of advisors entitled to be provided
by NTT Communications and DoCoMo in accordance with the timetable set out in
the Cooperation Agreement;</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 Php256 million, Php336 million and Php289 million for the years
ended December 31, 2005, 2004 and 2003, respectively.  As at December 31, 2005 and 2004, outstanding obligations of PLDT amounted to Php23 million and
Php49 million, respectively.</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>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 with PT Asia Cellular Satellite, as amended in December
1998 and as assigned and transferred to AIL, under which PLDT was granted the
exclusive right to sell ACeS services in the Philippines.  In exchange, the Air
Time Purchase Agreement required PLDT to purchase from PT Asia Cellular
Satellite at least US$5 million worth of air time annually over ten years,
commencing on January 1, 2002, the date of commercial operations.</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">In
the event 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"><i>&nbsp;</i></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:40.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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.  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 for the
year 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 would cover, among other things, 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 ongoing negotiations, AIL advised PLDT of the termination
of the Standstill Agreement and the reinstatement of the terms under the
original Air Time Purchase Agreement effective January 1, 2002, following the
lapse of the November 15, 2003 deadline
set in the Standstill Agreement for the negotiation of a revised Air Time
Purchase Agreement.  Negotiations are continuing with the relevant parties
towards an amicable settlement of this matter.  </p>

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

<p style="margin-top:0;margin-bottom:0">As at December 31, 2005 and 2004, PLDT&#146;s outstanding payables under the original Air Time Purchase Agreement
was Php3,493 million and Php2,728 million, respectively.  Total fees under this
agreement amounted to Php1,008 million, Php1,299 million and Php1,919 million
for the years ended December 31, 2005, 2004 and 2003, respectively.  As at December 31, 2005, PLDT&#146;s aggregate remaining minimum obligation under the original Air
Time Purchase Agreement was approximately Php11,120 million.  See <i>Note 21 &#150;
Contractual Obligations and Commercial Commitments</i> and <i>Note 22 &#150;
Provisions and Contingencies</i> to the accompanying consolidated financial
statements in Item 18 for further details relating to the Air Time Purchase
Agreement with AIL.  </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='line-height:50%' 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;page-break-after:avoid' 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 the 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 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 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 30, 2012.</p>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-indent:0in' style="margin-top:0;margin-bottom:0"><i>Agreement
between Smart and Asia 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 cellular business
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 2004,
the agreement was amended, reducing the technical service fees to be paid by
Smart to ALBV to 1% of net revenues effective January 1, 2004.</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On February 18, 2004, Smart and ALBV entered into a renewal of the technical service
agreement extending the effectivity of the terms of the agreement to February 23, 2008.  Furthermore, in view of the acquisition by Smart of Piltel Series K
Class I Convertible Preferred Stock held by PLDT, the parties agreed to make
the consolidated net revenues of Smart the basis for the computation of the 1%
royalty payable by Smart to ALBV, effective from <br>
January 1, 2005.  </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.
Service Agreement fees were paid 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 Php567 million, Php507 million and Php429 million for the years ended December 31, 2005, 2004 and 2003, respectively.  Outstanding obligations of Smart under
the Technical Service Agreement amounted to Php194 million and Php267 million
as at December 31, 2005 and 2004, 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 properties of
the PLDT Group.  Insurance premiums are remitted to Gotuaco and the broker&#146;s
fees are settled between Gotuaco and the insurance companies.  In addition,
PLDT has an insurance policy with Malayan Insurance Co., Inc., or Malayan,
wherein premiums are paid directly to Malayan.  Total insurance expenses under
these agreements amounted to Php468 million, Php488 million and Php565 million
for the years ended December 31, 2005, 2004 and 2003, respectively.  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">There have been no loans between PLDT and any related party during the
period beginning January 1, 2004 through the date of filing of this annual
report.</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">Except for the transactions described above, there were no other
material transactions during the last two years, nor are there 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='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">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, 2004 through the date of filing of this annual report.</p>

<p style='text-indent:.5in;line-height:8.0pt' 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='page-break-after:auto' 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='page-break-after:auto' 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, neither PLDT nor any of its subsidiaries is a party to,
and none of their respective property is subject to, any pending legal
proceedings which PLDT considers to be potentially material to its and its
subsidiaries&#146; business.</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>Victor C. Fernandez</i></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">On
 December 9, 1999, a holder of preferred shares of stock of PLDT, Victor C.
Fernandez, filed a petition against certain directors of PLDT questioning,
among other things, the validity of the resolutions of the board of directors
of PLDT then authorizing the acquisition of Smart.  Fernandez's application for
a restraining order to enjoin the holding of the PLDT stockholders' meeting on December 10, 1999 was denied by the Philippine SEC.  At the shareholder&#146;s meeting, the
stockholders 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='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">In
the proceedings before the Makati Court to which the case was transferred, the
transactions subject of the suit were limited to PLDT&#146;s acquisition of Smart
and NTT&#146;s entry into PLDT (the &#147;Questioned Transactions&#148;), and the issues to be
resolved were limited to whether or not the Questioned Transactions violate the
constitutional limitations on foreign equity in public utilities, the Foreign
Investments Act and the Anti-Dummy Law and would result in a monopoly. </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
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 stockholders 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;).  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>.  </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
 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.  In an Order dated February 27, 2004, (the &#147;Order&#148;), the
Makati Court dismissed respondent directors&#146; 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 which the Makati Court denied in
a resolution dated June 2, 2004.  Respondent directors filed an appeal with the
Court of Appeals assailing the validity of the Order by the Makati Court which
appeal remains pending.</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">On
 November 22, 2004, the Supreme Court&#146;s Second Division denied with finality
Fernandez&#146;s Motion for Reconsideration, and Motion for Referral to SC <i>En
Banc.</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-top:0;margin-bottom:0">On January 4, 2005, Fernandez filed with the Supreme Court a second motion for reconsideration of the Supreme
Court&#146;s resolution denying the Petition and a motion for leave to file and
admit second motion for reconsideration of the Supreme Court&#146;s resolution
denying the Motion for Referral to SC <i>En Banc</i>.  Both motions were denied
by the Supreme Court on January 31, 2005 and April 11, 2005, respectively. Thereafter, the Supreme Court issued an Entry of Judgment certifying that its
resolution dated June 9, 2003 denying Fernandez&#146;s Petition became final and
executory on December 21, 2004.  The Entry of Judgment puts to rest all legal
issues regarding PLDT&#146;s acquisition of Smart and the entry of NTT
Communications into PLDT. </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:auto' style="margin-top:0;margin-bottom:0">Taxation</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 made a reasonable estimate of the amount necessary to pay or settle any
contested assessment in the event of an unfavorable judgment against us and
have made the appropriate provisions in our consolidated financial statements
as at December 31, 2005 aggregating Php742 million in respect of the following:</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>National Internal Revenue 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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT has filed various cases against the Commissioner
of the Bureau of Internal Revenue for refunds and/or tax credit of:</p>

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

<p style='margin-top:0in;margin-right: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;
erroneously paid value-added taxes, compensating taxes, advance
sales taxes and other internal revenue taxes on PLDT's importation of various
equipment, machinery and spare parts; and</p>

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

<p style='margin-top:0in;margin-right: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;
erroneously paid withholding tax on separation pay of employees
who availed of the benefits under the Manpower Reduction Program. </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:8.0pt' 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">In the case of the claim for refund of erroneously
paid value-added taxes, compensating taxes, advance sales taxes and other
internal revenue taxes on PLDT&#146;s importation of various equipment, machinery
and spare parts, the Supreme Court, on December 15, 2005, rendered a decision
partially granting the claim for refund or tax credit certificates and ordering
the Commissioner of Internal Revenue to issue a Tax Credit Certificate or to
refund to PLDT approximately Php95 million representing erroneously collected
advance sales tax and compensating tax.</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 case of the claim for refund of erroneously
paid withholding tax on separation pay is currently still pending in the
Supreme Court.</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>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"><i>&nbsp;</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Since
1994, following the NTC's rejection of PLDT's formal protest against the
assessments by the NTC of permit, supervision and regulation fees, PLDT and the
NTC have been involved in legal proceedings before the Court of Appeals and the
Supreme Court.  The basis of these legal proceedings is the NTC's inclusion of
stock dividends and capital in excess of the par value of stock in computing
these fees, and the NTC's assessment of administrative fees for the increase in
PLDT's authorized capital stock even in the absence of NTC's performance of
regulatory services.  As at December 31, 2005, PLDT has paid a total amount of
Php1,960 million in supervision and regulation fees of which Php1,724 million
were paid under protest.  See <i>Note 22 &#150; Provisions and Contingencies</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"><i>Local
business and franchise tax assesments</i></p>

<p style='text-indent:.5in' 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. No. 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 <br>
R.A. No. 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. No. 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. No. 7160, implicitly restored its local franchise and
business taxes exemption privilege under Section 12 of R.A. No. 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. No. 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;
page-break-after:avoid' 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 declared not exempt from the local franchise tax.  Although PLDT believes that
it is not liable to pay local franchise and business taxes, PLDT has entered
into compromise settlements with several LGUs in order to maintain and preserve
its good standing and relationship with these LGUs.  Under these compromise
settlements, which have been approved by the relevant courts, PLDT has paid a
total amount of Php505 million as at December 31, 2005 in full payment for
local franchise tax covering up to the end of 2004.  </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 the remaining assessments amounting to approximately
Php3.7 million as at December 31, 2005, 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. No.
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.  As at December 31, 2005, there are two cases pending in the Supreme Court.  The motions for
reconsideration of the two other unfavorable decisions of the Supreme Court
have been denied with finality.</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
currently expects that going forward it will pay local franchise and business
taxes on an annual basis and based on the gross receipts received or collected
for services rendered within the jurisdiction of the respective taxing
authority.  </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
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: <br>
(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. No. 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;
punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">Smart has recently been declared exempt from payment
of local franchise tax to the City of Makati in a decision dated August 3, 2004 by the Makati Regional Trial Court, or RTC.  The City of Makati has filed
their motion for reconsideration and Smart has filed its opposition to that
motion for reconsideration. </p>

<p style='text-indent:.5in;punctuation-wrap:hanging' 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: <br>
(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. No. 7293) which came after the effectivity of R.A.
No. 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 3% of all gross annual 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' style="margin-top:0;margin-bottom:0">Piltel&#146;s
protest of the assessments was denied by the City of Makati on December 18, 2001.  Piltel then filed a petition with the Makati RTC appealing the local
franchise business taxes.  On December 10, 2002, the Makati RTC rendered its
judgment granting Piltel&#146;s petition and enjoining the City of Makati from
assessing and collecting any further annual local franchise business taxes from
Piltel.  The City of Makati filed its motion for reconsideration of this
judgment with the Makati RTC, which was subsequently denied.  On April 1, 2003, the City of Makati filed a Petition for Review with the Court of Appeals.
On July 12, 2004, the Court of Appeals rendered a decision upholding the Makati
RTC that Piltel is exempt from payment of 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">The
City of Makati appealed to the Supreme Court, which issued a resolution dated October 13, 2004 denying with finality the appeal of the City of Makati on the grounds of
technicality.  The Supreme Court ruled, however, that the petition failed to
sufficiently show that the Court of Appeals committed any reversible error in
the questioned judgment to warrant the exercise of the discretionary appellate
jurisdiction 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"><i>Piltel&#146;s Bureau of Internal Revenue Assessment</i></p>

<p style='page-break-after:auto !msorm;margin-bottom:
0in;margin-bottom:.0001pt;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">Piltel
filed applications for compromise settlements with the BIR for the deficiency
tax assessments of 1998 and 1999, citing as basis for the compromise settlement
its financial incapacity on account of networth and earnings deficit.  On June 22, 2005, however, Piltel received a letter from the BIR dated May 9, 2005 denying the applications for compromise settlements.  </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
 June 16, 2005, Piltel filed an administrative protest against the 2001
deficiency income tax and VAT assessments arising from a letter notice.  The
BIR granted the request for reconsideration by virtue of the tax verification
notice dated June 29, 2005, which was received by Piltel on July 1, 2005.  In its letter dated August 30, 2005, which Piltel received on September 19, 2005, the BIR issued its final decision on the disputed assessment, which
denied the administrative protest filed by Piltel. On October 19, 2005, Piltel filed a petition for review with the Court of Tax Appeals relating to this
tax assessment.  On December 12, 2005, Piltel filed a collective application
for compromise settlement with the BIR for the deficiency tax assessments
arising from taxable years 1998, 1999 and 2001, citing &#147;reasonable doubt as to
the validity of the tax assessments&#148; as basis.  The prescribed minimum
percentage of compromise settlement for such basis is 40% of the basic assessed
tax.  On January 27, 2006, Piltel received the favorable recommendation and
approval from the BIR on the said application for compromise settlement.  On January 31, 2006, Piltel settled the total amount of Php113.9 million, which is equivalent
to 40% of the basic taxes per final assessment notices received, to effect the
immediate cancellation of the tax assessments.</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
February 24, 2006, the BIR accepted Piltel&#146;s application for compromise
settlement of Income Tax and VAT for the years 1998 and 1999 and income tax and
VAT for the year 2001, and accordingly, issued a Certificate of Availment on
the said date.</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">Piltel
also availed of the BIR&#146;s Enhanced Voluntary Assessment Program, or EVAP, on December 29, 2005.  EVAP grants last priority in audit for taxpayers paying the required
increase in tax payment from the base year or the minimum EVAP payment,
whichever is higher.  Piltel&#146;s EVAP availment, which involved payment of Php3
million, covered the income tax for the taxable year 2003 and the expanded
withholding tax for the taxable years 2003 and 2004.  Piltel currently expects
the BIR to issue an EVAP Certificate of Qualification.</p>

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

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0"><i>U.S.</i><i> Federal Communications Commission, or FCC, Ruling versus Philippine
Telecommunications Companies</i></p>

<p style="margin-top:0;margin-bottom:0">Effective as at 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 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 were
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-bottom:0in;margin-bottom:.0001pt' 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. DOJ
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.  The U.S. FCC stated that it was dismissing this request
as moot because of the U.S. FCC&#146;s recently adopted International Settlements
Policy Reform Order which eliminated ISR policies.  </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">Although
not included in the initial list of countries exempted from the U.S. FCC&#146;s
International Settlements Policy, or ISP, the U.S. FCC identified the
U.S.&#150;Philippines route as eligible for being removed from the ISP in accordance
with its newly established procedures for doing so.  Under this procedure, the
U.S. FCC asked for public comment on the removal of the Philippines from the ISP.  In comments filed in June and July 2004, removal was supported by several
Philippine and U.S. carriers, including AT&amp;T and MCI, and was opposed by
one U.S. carrier, International Access, Inc.  In November 2004, the U.S. FCC
exempted a number of additional countries from the ISP, but not the Philippines.  Instead, the U.S. FCC stated that it would rule separately regarding the Philippines after reviewing the issues raised by International Access, Inc.  </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
July 6, 2004, PLDT filed with the U.S. FCC a petition for reconsideration of
the U.S. FCC&#146;s May 13, 2004 Order on the grounds that the order should have
vacated as moot the International Bureau&#146;s March 10, 2003 Order.</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 decision dated August 15, 2005, the U.S. FCC: (1) denied PLDT&#146;s petition for
reconsideration of the May 13, 2004 Order with respect to the finding that PLDT
and other Philippine carriers, in raising their rates for termination of
international calls from the U.S., &#147;whipsawed&#148; AT&amp;T and MCI; and (2)
removed the U.S.-Philippines route from the restrictions of the U.S. FCC&#146;s ISP
as applied to the termination of such traffic from the U.S.  In so doing, the
U.S. FCC also found that separate allegations made by International Access,
Inc. against PLDT failed to demonstrate competitive concerns regarding the
U.S.-Philippines route that would warrant retaining the restrictions of the
ISP.</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">Investigation
by U.S. Department of Justice </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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In January 2004, PLDT received a grand jury subpoena
seeking documents and a PLDT employee was subpoenaed to testify before the
grand jury in connection with a criminal investigation being conducted by the
U.S. DOJ with respect to alleged anti-trust violations relating to the
provision of international termination services in the Philippines.  The U.S. DOJ has also requested testimony and documents from Smart in connection with
this investigation.  Further, in March 2004, PLDT (U.S.) Ltd., a subsidiary of
PLDT Global, received a grand jury subpoena seeking documents, in response to
which PLDT (U.S.) Ltd. produced documents.  In
February 2005, two former employees of PLDT (U.S.) Ltd. testified before the
grand jury in the U.S. DOJ matter.  A PLDT employee was also scheduled to
reappear for testimony in February, but his appearance was postponed.  On May 11, 2005, the U.S. DOJ informed PLDT&#146;s legal
counsel in Washington D.C., Covington &amp; Burling, that the U.S. DOJ has terminated
its anti-trust investigation relating to termination rate increases implemented
in early 2003 by certain Philippine long distance carriers including PLDT and
that no enforcement action will be taken.  See
<i>Note</i><i> 25 &#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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">In
2005 and 2004, PLDT declared cash dividends of Php1,628 million and Php1,529
million, respectively, solely for its preferred shareholders.  In addition, on
March 1, 2005, PLDT declared a cash dividend at Php14 per common share to
holders of record as at March 31, 2005, which was paid on May 12, 2005,
constituting the first cash dividend declaration to common shareholders since
March 2001.  This was followed by cash dividend declarations made by PLDT on
its common stock on May 5, 2005 at Php21 per common share to holders of record
as at June 3, 2005, which was paid on July 14, 2005, on November 8, 2005, at
Php21 per common share to holders of record as of November 28, 2005, which was
paid on December 28, 2005, and on February 27, 2006 at Php28 per common share
to holders of record as of March 20, 2006, which was paid on April 20, 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">Our
current policy is to declare and pay dividends taking into consideration the
interests of our shareholders as well as our working capital, capital
expenditures and debt servicing requirements.  Also taken into consideration
are our ability to meet loan covenant requirements and the required prior
written consents of certain creditors and preferred stockholders (for stock
dividends), under certain conditions, in the declaration and payment of
dividends as discussed in <i>Note 12 &#150; Interest-bearing Financial Liabilities </i>and
<i>Note</i> <i>15 &#150; Stockholders&#146; Equity</i> to the accompanying consolidated
financial statements in Item 18.  The retention of earnings is necessary to
meet the funding requirements of our business expansion and development
programs.  Unappropriated retained earnings of PLDT include undistributed
earnings representing accumulated equity in the net earnings of our
subsidiaries, which are not available for distribution as dividends until
received in the form of dividends from such subsidiaries (see <i>Note 15 &#150; Stockholders&#146;
Equity</i> to the accompanying consolidated financial statements in Item 18).
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="OLE_LINK5"></a><a name="OLE_LINK4"></a><a
name="_Toc75779241"></a><a name="_Toc46082301">Common Capital Stock and American Depositary Shares (&#147;ADSs&#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.  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
PLDT 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
ADR facility.  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 the ADRs.  The ADSs have been listed and
are traded on the New York Stock Exchange, or NYSE, 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="margin-top:0;margin-bottom:0">In 2005, a total of
37.8 million shares of PLDT's common capital stock were traded on the
Philippine Stock Exchange.  During the same year, the volume of trading was
54.7 million ADSs on the New York Stock Exchange.</p>

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

<p style='line-height:10.0pt !msorm' style="margin-top:0;margin-bottom:0">As of May 31, 2006, approximately 11,538 stockholders
were Philippine persons and held approximately 38% of PLDT&#146;s common capital
stock.  In addition, as of May 31, 2006, there was a total of over 36 million
ADSs outstanding, substantially all of which PLDT believes were held in the United States by 398 holders.</p>

<p style='text-indent:0in;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">High and low sales prices for PLDT&#146;s common shares on
the Philippine Stock Exchange and ADSs on the New York Stock Exchange 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='text-indent:0in;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:6.45in;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=3 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>Philippine Stock<br>
 Exchange</b></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">&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 align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>New York</b><b> Stock <br>
 Exchange</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>High</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">&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 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>
 <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;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=' 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">&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 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 style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2006</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>
 <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>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-right:.7pt;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 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">First Quarter</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">Php1,930.00</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">Php1,675.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$38.09</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$32.20</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">January</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">1,860.00</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">1,730.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">36.07</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">32.20</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">February</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">1,895.00</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">1,675.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">36.80</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">33.00</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">March</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,930.00</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <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;
 height:9.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,775.00</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <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;
 height:9.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">38.09</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <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;
 height:9.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">34.40</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Second Quarter (through June 28, 2006) </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">2,295.00</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">1,700.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">43.99</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">32.15</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">April</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">2,050.00</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">1,920.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">40.17</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">37.49</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">May</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">2,295.00</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">1,940.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">43.99</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">36.28</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">June (through June 28, 2006)</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">2,020.00</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">1,700.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">39.25</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">32.15</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2005</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">Php1,860.00</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">Php1,310.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$34.35</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">US$23.50</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">First Quarter</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">1,495.00</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">1,310.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">27.75</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">23.50</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Second Quarter</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">1,645.00</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">1,330.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">30.07</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">24.10</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Third Quarter</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">1,715.00</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">1,520.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">30.59</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">27.28</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fourth Quarter</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">1,860.00</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">1,630.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">34.35</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">28.88</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' 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=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,835.00</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">1,730.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">34.35</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">31.72</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">2004</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">Php1,505.00</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">Php810.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$27.03</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">US$14.38</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">First Quarter</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">1,050.00</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">810.00</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 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=' padding: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">14.38</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Second Quarter</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">1,165.00</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">960.00</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 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=' padding: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">16.97</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Third Quarter</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">1,450.00</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">1,150.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">25.72</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">20.90</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fourth Quarter</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">1,505.00</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">1,215.00</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 align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">27.03</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">21.83</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">2003</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">990.00</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">265.00</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 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=' padding: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">4.85</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">2002</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">565.00</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">209.00</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 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=' padding: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">3.85</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">2001</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">1,060.00</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">332.50</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 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=' padding: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">6.55</p>
 </td>
 </tr>
</table></center></div>

<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' style="margin-top:0;margin-bottom:0"><a name="OLE_LINK65"></a><a
name="OLE_LINK64">On </a>October 24, 2005,
PLDT issued to JPMorgan, as depositary, and to the holders of the Series III
Convertible Preferred Stock a notice of mandatory conversion of all of its
outstanding 4,616,200 Series III Convertible Preferred Stock into shares of
PLDT common stock, with each share of Series III Convertible Preferred Stock
convertible to 1.7129 shares of Common Stock.  The Series III Convertible Preferred Stock had been issued in 1994 in
connection with a Global Depositary Receipt, or GDR, facility, pursuant to
which GDRs evidencing Global Depositary Shares, or GDS, were issued, with each
GDS representing one share of Series III Convertible Preferred Stock of PLDT.  As of the date of the issuance of the notice of
mandatory conversion, the conditions for mandatory conversion under the terms
of the Series III Preferred Stock had been satisfied, including: (i) that the
average closing price of PLDT&#146;s ADSs for the 30-day period ending seven days
prior to the date in which notice of the mandatory conversion was given was
above US$29.19; (ii) that there were no dividends in arrears on any shares of
the Series III Convertible Preferred Stock; and (iii) that PLDT had sufficient
distributable reserves to pay the fixed preferential dividends on the shares of
Series III Convertible Preferred Stock, calculated down to and including the
mandatory conversion date.</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">In
November 2005, PLDT issued 710,891 shares of PLDT common stock on account of
the voluntary conversion of 415,023 shares of Series III Convertible Preferred
Stock.  On December 19, 2005, the mandatory conversion date, all of the
outstanding shares of Series III Convertible Preferred Stock were mandatorily
converted into shares of PLDT common stock.  A total of 7,907,032 shares of
PLDT common stock were issued as a result of the voluntary and mandatory
conversions of all the Series III Convertible Preferred Stock.  </p>

<p 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='text-indent:.5in;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:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779244"></a><a
name="_Toc46082304">Articles of
Incorporation and By-Laws</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='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='text-indent:.5in;line-height:8.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Purpose of PLDT</i></p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT's
Articles of Incorporation have been filed with the Philippine SEC and PLDT has
been issued Philippine 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='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

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

<p style='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">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='line-height:8.0pt' 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">Description of PLDT Capital Stock</p>

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

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

<p style="margin-top:0;margin-bottom:0"><i>Common Stock</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">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='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">(a)&nbsp;&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='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">(b)&nbsp;&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='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">(c)&nbsp;&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="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="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;
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; (c) in case of merger or
consolidation; and (d) in case of investment of funds of the corporation in any
other corporation or business or for any purpose other than the primary purpose
for which it was organized, except where the investment by the corporation is
reasonably necessary to accomplish its primary purpose as stated in its
articles of incorporation.</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)&nbsp;&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 except
where the investment is reasonably necessary to accomplish its primary purpose
as stated in the corporation&#146;s articles of incorporation; (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='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">(c)&nbsp;&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='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">(d)&nbsp;&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='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>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' style="margin-top:0;margin-bottom:0"><i>Meetings</i></p>

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

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

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">The
By-Laws of PLDT provide that each share of common 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='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">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='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>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. No. 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='line-height:8.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' 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 the 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;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>Dividends</i></p>

<p style='text-indent:.5in;line-height:10.0pt;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
requires 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;line-height:10.0pt' 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;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">PLDT
has entered into certain loan and credit agreements, which restrict the
declaration and payment of dividends by PLDT.  In particular, under certain 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 0.90:1 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.  On March 1, 2005, PLDT declared a cash dividend at Php14 per common share to holders of
record as at March 31, 2005, which was paid on May 12, 2005, constituting the first cash dividend declaration to common shareholders since March 2001.  This
was followed by cash dividend declarations made by PLDT on its common stock on
May 5, 2005 at Php21 per common share to holders of record as at June 3, 2005,
which was paid on July 14, 2005, and on February 27, 2006 at Php28 per common
share to holders of record as of March 20, 2006, which was paid on April 20,
2006.</p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Preferred Stock</i></p>

<p style='text-indent:.5in;line-height:10.0pt' 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;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"><i>Issued and Outstanding Preferred Stock</i></p>

<p style='text-indent:.5in;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">The series of Preferred Stock and the number of shares
issued and outstanding under each series as at <br>
May 31, 2006 are as follows:<b> </b></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='width:95.3%;border-collapse:collapse'>
 <tr style='height:.2in'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:.2in'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 6.0pt;margin-left:0in' 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;
 height:.2in'>
 <p align=center style='margin-top:6.0pt;margin-right:0in;
 margin-bottom:6.0pt;margin-left:0in;text-align:center' style="margin-top:0;margin-bottom:0"><b><u>No. of Shares</u></b></p>
 </td>
 </tr>
 <tr style='height:13.05pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:13.05pt'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
 margin-left:0in;line-height:normal' style="margin-top:0;margin-bottom:0">Series
 A to FF 10% Cumulative Convertible</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:13.05pt'>
 <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">406,961,650</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.2in'>
 <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:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.2in'>
 <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 style='height:.2in'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:.2in'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
 margin-left:0in;line-height:normal' style="margin-top:0;margin-bottom:0">Series V Cumulative Convertible Redeemable</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:.2in'>
 <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">52,478</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.2in'>
 <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:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:.2in'>
 <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">3,588,105</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:.2in'>
 <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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:.2in'>
 <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 FF 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 IV Cumulative Non-Convertible Redeemable Preferred Stock are entitled to
receive cumulative dividends at the rate of 13.5% per annum based on the
paid-up subscription price.  It is 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">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 JPY40.7189
per share, respectively.  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 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 into shares
of PLDT 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 per share, US$36.132
per share and JP&yen;4,071.89 per share, for Series V, VI and VII Convertible
Preferred Stock, 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">As
at December 31, 2005, 2,480,553 shares of Series V Convertible Preferred Stock
and 896,190 shares of Series VI Convertible Preferred Stock had been converted
to PLDT common shares.  As at December 31, 2005, 240,887 shares of Series V,
4,398,914 shares of Series VI and 3,842,000 shares of Series VII Convertible
Preferred Stocks remained outstanding.  The aggregate value of the put option
based on outstanding shares as at December 31, 2005 was Php15,890 million, of
which Php8,844 million is puttable on June 4, 2008 and Php7,046 million on June
4, 2009, if all of the outstanding shares of Series V, VI and VII Convertible
Preferred Stocks were mandatorily converted and all the underlying common
shares were put to PLDT.  The market value of the underlying shares of common
stock was Php15,564 million, based on the market price of PLDT common shares of
Php1,835 per share as at December 31, 2005.</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' 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='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779245"></a><a
name="_Toc46082305">&nbsp;</a></p>

<p align=left style='text-align:left;text-indent:.5in;page-break-after:
auto' style="margin-top:0;margin-bottom:0">Under the Cooperation Agreement, each of NTT
Communications, DoCoMo and the FP Parties agreed that to the extent permissible
under applicable laws and regulations of the Philippines and other jurisdictions,
subject to certain conditions, it shall cast its vote as a PLDT shareholder in
support of any resolution proposed by the PLDT board of directors for the
purpose of safeguarding PLDT from any Hostile Transferee. See &#147;Item 7. Major
Shareholders and Related Party Transactions &#151; Related Party Transactions &#151; Cooperation Agreement with the FP Parties, NTT Communications and
DoCoMo&#148;.</p>

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

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0">Material Contracts</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 entered into the following contract within the two years preceding the
date of this annual report which is or may be material:</p>

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

<p style="margin-top:0;margin-bottom:0">The Cooperation Agreement, dated January 31, 2006, entered into by and among PLDT, First Pacific, Metro Pacific
Corporation, Metro Asia Link Holdings, Inc., Metro Pacific Resources, Inc.,
Larouge B.V., Metro Pacific Assets Holdings, Inc., NTT Communications and
DoCoMo. </p>

<p 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;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 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 peso, except dividends on the
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 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 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 at December 31, 2005, approximately 86% 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 14 &#150; Preferred Stock
Subject to Mandatory Redemption</i> and <i>Note 15 &#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">Principal
of and interest on PLDT's 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;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
following is a description of the material Philippine and United States federal
income tax consequences to United States Holders (as defined below) of owning
shares of Common Stock and ADSs.  It applies to you only if you hold your Common
Stock or ADSs 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 Common Stock or ADSs 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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">You are a United States Holder if you are a beneficial owner of Common
Stock or ADSs 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='text-indent:0in !msorm;text-indent:.5in' style="margin-top:0;margin-bottom:0">In general,
taking into account the earlier assumptions, for United States federal income
tax purposes, if you hold ADRs evidencing ADSs, you will be treated as the
owner of the shares represented by those ADRs.  Exchanges of
shares for ADRs, and ADRs for shares, generally will not be subject to United States federal income tax.</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='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Philippine 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>Taxes on Exchange of ADSs for Common Stock </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">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 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 <br>
(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 20%
effective November 1, 2005 (which represents the difference between the regular
income tax on non-resident non-Philippine corporations of 35% effective November
1, 2005 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 35% effective November
1, 2005.  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.  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">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 35% effective November 1,
2005.  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;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Capital Gains Tax and Stock Transaction Tax</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 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>Documentary Stamp Taxes</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 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='margin-bottom:0in;margin-bottom:.0001pt' 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, however, there is no
corresponding requirement, unless a transfer of the ADRs 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 ADRs will be treated as the owners of the underlying shares
of Common Stock.  Deposits and withdrawals by United States Holders of shares
of Common Stock in exchange for 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 before January 1, 2011 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 121-day period beginning 60 days before the ex-dividend
date.  Dividends we pay with respect to the Common Stock or ADSs 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 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 the Depositary, in the
case of ADSs, 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 Common Stock
or ADSs 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.  Dividends paid in taxable years beginning before
January 1, 2007 generally will be &#147;passive&#148; or &#147;financial services&#148; income, and
dividends paid in taxable years beginning after December 31, 2006 will,
depending on your circumstances, be &#147;passive&#148; or &#147;general&#148; income which, in
either case, 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;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"><i>Sale</i><i> or Other Disposition of Equity Securities</i></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 United States Holder will
recognize capital gain or loss upon the sale of <a name="OLE_LINK26"></a><a
name="OLE_LINK25">Common Stock or ADSs </a>in an amount equal to the difference
between such United States Holder's basis in the Common Stock or ADSs 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 Common
Stock or ADSs have been held for more than one year.  Capital gain of a
non-corporate U.S. holder that is recognized in taxable years beginning on or
after May 6, 2003 and before January 1, 2011 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">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 Common Stock or ADSs 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 Common Stock or ADSs 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 Common Stock or ADSs, gain realized on
the sale or other disposition of your Common Stock or ADSs 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 Common Stock or
ADSs 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;line-height:8.0pt' 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 100 F Street, N.E., 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, 100 F Street, N.E., 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, on which the American Depositary Shares representing our Common
Stock are listed.</p>

<p style='text-indent:.5in;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="_Toc75779249"></a><a
name="_Toc46082311">Item 11.     Quantitative
and Qualitative Disclosures about Market Risks</a></p>

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

<p style='text-indent:.5in' 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='page-break-after:auto' 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='margin-left:0in;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. </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">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 and equity 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:8.0pt' 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">As at December 31, 2005, the Philippine peso had
appreciated by 6% against the U.S. dollar to Php53.062 to US$1.00 from
Php56.341 to US$1.00 as at December 31, 2004.  As at December 31, 2004, on the
other hand, the peso depreciated by 1% to Php56.341 to US$1.00 from Php55.586
to US$1.00 as at December 31, 2003.  As at December 31, 2005, the Philippine peso had appreciated by 18% against the Japanese yen to Php0.4504 to JP&yen;1
from Php0.5495 to JP&yen;1 as at December 31, 2004.  On the other hand, as at December 31, 2004, the peso depreciated by 6% to Php0.5495 to JP&yen;1 from Php0.5193 to JP&yen;1
as at December 31, 2003.  As such, we recognized foreign exchange gains of Php8,196
million in 2005 as compared to foreign exchange losses of Php2,776 million
recorded in 2004.  </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 at December 31, 2005 and 2004:</p>

<p style='text-indent:.5in;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:96.2%;margin-left:18.4pt;border-collapse:collapse'>

 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <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=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:8.65pt'>
 <p align=center style='margin-top:3.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:8.65pt'>
 <p align=center style='margin-top:3.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>U.S. Dollar</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:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Php Equivalent</b>(1)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">U.S. Dollar</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Php Equivalent(2)</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=center style='text-align:center;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;height:8.65pt'>
 <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='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Current Financial Assets</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <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=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:8.65pt'>
 <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=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <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;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Cash
 and cash equivalents</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$244</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php12,957</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">US$248</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php13,902</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Short-term
 investments</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>55</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,934</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">73</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,090</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Trade
 and other receivables</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>139</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>7,371</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">146</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">8,229</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 assets</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>37</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">335</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <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:8.65pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 current financial assets</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:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 439</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:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>23,299</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:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">473</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:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">26,556</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <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=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Noncurrent Financial
 Assets</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <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=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 assets</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>50</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,648</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">73</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,116</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Notes
 receivable</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>6</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>346</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">286</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <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:8.65pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 noncurrent financial assets</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:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>  56</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:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,994</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:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">  78</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:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,402</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p style='margin-left:8.6pt' style="margin-top:0;margin-bottom:0"><b>Total
 Financial Assets</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$</b><b>495</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php26,293</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">US$551</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php30,958</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:8.6pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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=' border:none;padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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=' border:none;padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:8.65pt'>
 <p 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;height:8.65pt'>
 <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=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:8.65pt'>
 <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=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <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;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Current Financial
 Liabilities</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <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=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:8.65pt'>
 <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=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <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;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Accounts
 payable</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$42</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php2,227</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">US$32</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php1,754</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Accrued
 expenses and other current liabilities</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>68</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,587</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">82</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,599</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 liabilities</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>192</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">473</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Interest-bearing
 financial liabilities</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>337</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>17,867</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">483</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">27,195</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 current financial liabilities</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>450</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>23,873</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">607</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">34,021</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Noncurrent Financial
 Liabilities</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <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;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Interest-bearing
 financial liabilities &#150; net of current portion</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,738</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>92,218</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,292</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">129,108</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 liabilities</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>109</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,777</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">105</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,930</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p style='margin-left:.25in;text-indent:-9.4pt' style="margin-top:0;margin-bottom:0">Preferred stock subject to mandatory redemption</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>221</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>11,702</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">222</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">12,512</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 noncurrent financial liabilities</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,068</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>109,697</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,619</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">148,550</p>
 </td>
 </tr>
 <tr style='height:8.65pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0"><b>Total
 Financial Liabilities</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$2,518</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php133,570</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">US$3,226</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php182,571</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><i>(1)</i><i>   The exchange
rate used was Php</i><i>53.062 to US$1.00.</i></p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><i>(2)     </i><i>The exchange
rate used was Php56.341 to US$1.00.</i></p>

<p style='text-indent:.5in;line-height:8.0pt' 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">While a certain percentage of our revenues is either
linked to or denominated in U.S. dollars, 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 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 at December 31, 2005, approximately 98% of our total consolidated debts were denominated in foreign
currencies, principally in U.S. dollars.  Of our foreign currency-denominated
debts 3% are in Japanese yen, and the balance in U.S. dollars.  Thus, a
weakening of the Philippine peso against the U.S. dollar or Japanese yen will
increase both the principal amount of our unhedged foreign currency-denominated
debts (representing 53% of our consolidated debts,
or 44% net of our U.S. dollar cash balances as at December 31, 2005), and interest expense on our debt in peso terms.  In
addition, many of our financial ratios and other financial tests will be
negatively affected.  If, among other things, the value of the Philippine 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 12 &#150; Interest-bearing Financial Liabilities</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 our 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.</p>

<p style='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. In order to manage hedge costs of these
contracts, we utilize structures that include credit-linkage with PLDT as the
reference entity, combination of currency option contracts, and fixed to
floating coupon only swap agreements.  Accounted as either cash flow hedges or
transactions not designated as hedges, changes in the fair value of these
instruments are recognized as cumulative translation adjustments in equity
until the hedged item is recognized in earnings or directly to income for the
period.  As at December 31, 2005, PLDT&#146;s outstanding forward foreign exchange
contracts, principal-only long-term cross-currency swap contracts and currency
option contracts amounted to US$220 million and JP&yen;1,282 million; US$550
million; and US$175 million, respectively.  Smart has no outstanding forward
foreign exchange contracts as at December 31, 2005.</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.  We make use of hedging instruments
and structures solely for reducing or managing financial risks associated with
our liabilities and not for trading or speculative purposes.</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 table below sets out the
carrying amount, by maturity, of our financial instruments that are exposed to
interest rate risk for the years ended December 31, 2005 and 2004.  Financial instruments that are not subject to interest rate risk were not included in the
table:</p>

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

<p style="margin-top:0;margin-bottom:0">Year Ended December 31, 2005</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:15.0pt'>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <p align=center style='margin-left:9.0pt;text-align:center;
 text-indent:-9.0pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Over 5</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In U.S.</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Fair Value</b></p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-left:9.0pt;text-align:center;
 text-indent:-9.0pt' 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;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>Below 1 year</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>1-2 years</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>2 &#150; 3 years</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>3-5 years</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>years</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>Dollar</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>In Php</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>In Php</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=3 valign=bottom style=' border:none;
 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>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding: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;padding: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=' border:none;padding: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=' border:none;padding: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;padding: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;padding: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>(in millions)</b></p>
 </td>
 <td   valign=bottom style=' border:none;padding: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;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>
 </tr>

 <tr>
 <td   colspan=3 valign=bottom 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"><b>Liabilities:</b></p>
 </td>
 <td   colspan=3 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=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=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>
 <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"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom 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">Long-term Debt</p>
 </td>
 <td   colspan=3 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=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=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>
 <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   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0"><i>Fixed
 Rate</i></p>
 </td>
 <td   colspan=3 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=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=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>
 <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   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">US$
 Notes (in millions)</p>
 </td>
 <td   colspan=3 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">115</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">159</p>
 </td>
 <td   valign=bottom style=' 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">&#150;</p>
 </td>
 <td   valign=bottom style=' 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">175</p>
 </td>
 <td   valign=bottom style=' 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">549</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">998</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">52,980</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">58,780</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Interest
 rate</p>
 </td>
 <td   colspan=3 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">9.25%</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">7.85% to 10.625%</p>
 </td>
 <td   valign=top style=' 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">&#150;</p>
 </td>
 <td   valign=top style=' 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">10.50%</p>
 </td>
 <td   valign=top style=' 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">8.35% and 11.375%</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:9.0pt;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">US$
 Fixed Loans (in millions)</p>
 </td>
 <td   colspan=3 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">64</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">45</p>
 </td>
 <td   valign=bottom style=' 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">31</p>
 </td>
 <td   valign=bottom style=' 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">22</p>
 </td>
 <td   valign=bottom style=' 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">280</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">442</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">23,451</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">17,350</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=3 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">4.49% to 7.75%</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">4.49% to 7.58%</p>
 </td>
 <td   valign=bottom style=' 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">4. 49% to 7.58%</p>
 </td>
 <td   valign=bottom style=' 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">4.49% to 5.65%</p>
 </td>
 <td   valign=top style=' 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">2.25%</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Japanese
 Yen (in millions)</p>
 </td>
 <td   colspan=3 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">23</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">24</p>
 </td>
 <td   valign=top style=' 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">12</p>
 </td>
 <td   valign=top style=' 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=top style=' 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=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">59</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">3,139</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">3,158</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=3 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">2.125%</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">2.125%</p>
 </td>
 <td   valign=top style=' 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">2.125%</p>
 </td>
 <td   valign=bottom style=' 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=top style=' 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=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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Philippine
 Peso (in millions)</p>
 </td>
 <td   colspan=3 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">15</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='margin-right:.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' 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">15</p>
 </td>
 <td   valign=top style=' 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=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">30</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">1,580</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">1,795</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=3 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">15.816% to 24%</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='margin-right:.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' 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">15.0%</p>
 </td>
 <td   valign=top style=' 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=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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0"><i>Variable
 Rate</i></p>
 </td>
 <td   colspan=3 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='margin-right:.6pt;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:.6pt;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:.6pt;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>
 <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   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">U.S.
 Dollar (in millions)</p>
 </td>
 <td   colspan=3 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">129</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">143</p>
 </td>
 <td   valign=bottom style=' 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">79</p>
 </td>
 <td   valign=bottom style=' 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">117</p>
 </td>
 <td   valign=bottom style=' 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">94</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">562</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">29,806</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">29,806</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=3 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">GOVCO&#146;s Cost + 0.20%; 0.05% to 3.625% over LIBOR</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">GOVCO&#146;s Cost + 0.20%; 0.05% to 3.625% over LIBOR</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">0.05% to 3.625% over LIBOR</p>
 </td>
 <td   valign=top style=' 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">.05% to 2.5% over LIBOR</p>
 </td>
 <td   valign=top style=' 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">1% over LIBOR</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Japanese
 Yen (in millions)</p>
 </td>
 <td   colspan=3 valign=top 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>
 <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">5</p>
 </td>
 <td   valign=top style=' 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">3</p>
 </td>
 <td   valign=top style=' 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=top style=' 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=' padding: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</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">709</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">709</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">1.70% over LIBOR</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">1.70% over LIBOR</p>
 </td>
 <td   valign=top style=' 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">1.70% over LIBOR</p>
 </td>
 <td   valign=top style=' 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=top style=' 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=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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Philippine Peso (in millions)</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">3</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">&#150;</p>
 </td>
 <td   valign=bottom style=' 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=' 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">2</p>
 </td>
 <td   valign=bottom style=' 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">7</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">12</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">648</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">648</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">1% over 91-day T-bill rate; 90-day PHIBOR + 3%</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">&#150;</p>
 </td>
 <td   valign=top style=' 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=top style=' 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">1% over 91-day T-bill
 rate </p>
 </td>
 <td   valign=top style=' 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">1% over 91-day T-bill
 rate</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-left:13.5pt;text-align:right;
 text-indent:-4.5pt' 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:double windowtext 1.5pt;border-right: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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 padding: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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 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=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 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=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 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=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 padding: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>2,11</b><b>6</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;
 padding: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>112,313</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;
 padding: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>112,246</b></p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom 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>
 <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='margin-right:.6pt;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='margin-right:.6pt;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='margin-right:.6pt;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>
 <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   colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0"><i>Interest
 rate swap (fixed to floating)</i></p>
 </td>
 <td   colspan=2 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='margin-right:.6pt;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:.6pt;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:.6pt;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>
 <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   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">U.S. Dollar (US$125 million)</p>
 </td>
 <td   colspan=3 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">&#150;</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">&#150;</p>
 </td>
 <td   valign=top style=' 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=top style=' 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=top style=' 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=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">(30)</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">(1,569)</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">(1,569)</p>
 </td>
 </tr>
 <tr>
 <td   colspan=5 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Japanese Yen (JPY15,037 million)</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">&#150;</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">&#150;</p>
 </td>
 <td   valign=top style=' 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=top style=' 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=top style=' 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=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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Fixed Rate on US$ notional </p>
 </td>
 <td   colspan=5 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">11.375%</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">11.375%</p>
 </td>
 <td   valign=top style=' 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">11.375%</p>
 </td>
 <td   valign=top style=' 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">11.375%</p>
 </td>
 <td   valign=top style=' 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">11.375%</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Variable Rate on JPY notional</p>
 </td>
 <td   colspan=4 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">8.11% over LIBOR</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">8.11% over LIBOR</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">8.11% over LIBOR</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">8.11% over LIBOR</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;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">8.11% over LIBOR</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 padding: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=' border:none;border-bottom:double windowtext 1.5pt;
 padding: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=' border:none;border-bottom:double windowtext 1.5pt;
 padding: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 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="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Year
Ended December 31, 2004</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:96.84%;;border-collapse:collapse'>

 <tr style='page-break-inside:avoid;height:15.0pt'>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <p align=center style='margin-left:9.0pt;text-align:center;
 text-indent:-9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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;
 height:15.0pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Over 5</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In U.S.</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <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 5.4pt 0in 5.4pt;
 height:15.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Fair Value</b></p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-left:9.0pt;text-align:center;
 text-indent:-9.0pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=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' style="margin-top:0;margin-bottom:0"><b>Below 1 year</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>1-2 years</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>2-3 years</b></p>
 </td>
 <td   colspan=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' style="margin-top:0;margin-bottom:0"><b>3-5 years</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>years</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>Dollar</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>In Php</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>In Php</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-left:9.0pt;text-align:center;
 text-indent:-9.0pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border: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: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=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">&nbsp;</p>
 </td>
 <td   colspan=2 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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border: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:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 <td   valign=bottom style=' border: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: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>
 </tr>

 <tr>
 <td   colspan=3 valign=bottom 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"><b>Liabilities:</b></p>
 </td>
 <td   colspan=2 valign=bottom 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>
 <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">&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>
 <td   colspan=2 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>
 <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">&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">&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">&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"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom 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">Long-term Debt</p>
 </td>
 <td   colspan=2 valign=bottom 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>
 <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">&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>
 <td   colspan=2 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>
 <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">&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">&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">&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   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0"><i>Fixed
 Rate</i></p>
 </td>
 <td   colspan=2 valign=bottom 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>
 <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">&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>
 <td   colspan=2 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>
 <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">&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">&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">&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   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">US$
 Notes (in millions)</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">110</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>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.4pt;text-align:right' style="margin-top:0;margin-bottom:0">272</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.4pt;text-align:right' style="margin-top:0;margin-bottom:0">175</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.4pt;text-align:right' style="margin-top:0;margin-bottom:0">549</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">1,236</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">69,652</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">73,662</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Interest
 rate</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">9.875%</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">9.250%</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.4pt;text-align:right' style="margin-top:0;margin-bottom:0">7.85% to 10.625%</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.4pt;text-align:right' style="margin-top:0;margin-bottom:0">10.5%</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.4pt;text-align:right' style="margin-top:0;margin-bottom:0">8.35% to 11.375%</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:9.0pt;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">US$
 Fixed Loans (in millions)</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">125</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">93</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">51</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">58</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">280</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"> 607</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">34,190</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">32,452</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">4.49% to 8.03%</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">4.49% to 7.95%</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">4.49% to 7.95%</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">4.49% to 7.58%</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">2.25%</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Japanese
 Yen (in millions)</p>
 </td>
 <td   colspan=2 valign=top 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>
 <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">27</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">27</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</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">  95</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">5,363</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">5,414</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:right' style="margin-top:0;margin-bottom:0">2.125%</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">2.125%</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">2.125%</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">2.125%</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Philippine
 Peso (in millions)</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">14</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">14</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">14</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>
 <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">2,371</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">2,537</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">11.18% to 24%</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">11.6% to 24%</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' 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=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">15%</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0"><i>Variable
 Rate</i></p>
 </td>
 <td   colspan=2 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>
 <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>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' 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=right style='margin-right:.6pt;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:.6pt;text-align:right' 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">&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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">U.S.
 Dollar (in millions)</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">212</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">213</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">139</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">117</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">132</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"> 813</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">45,832</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">45,832</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">GOVCO&#146;s Cost + 0.20%; 0.15% to 4.3% over LIBOR</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">GOVCO&#146;s Cost + 0.20%; 0.15% to 4.3% over LIBOR</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">GOVCO&#146;s Cost + 0.20%; 0.15% to 4.3% over LIBOR</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">0.15% to 4.3% over LIBOR</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">0.5% to 2.5% over LIBOR</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Japanese
 Yen (in millions)</p>
 </td>
 <td   colspan=2 valign=top 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>
 <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">6</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</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">  22</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">1,212</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">1,212</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">1.7% over JPY LIBOR </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">1.7% over JPY LIBOR </p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">1.7% over JPY LIBOR </p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">1.7% over JPY LIBOR</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Philippine Peso (in millions)</p>
 </td>
 <td   colspan=2 valign=top style=' 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=top style=' 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=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">7</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">14</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">777</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">777</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Interest rate</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">1% to 4% over 91-T-bill rate; 90-day PHIBOR + 3%</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">1% over 91-day T-bill rate; 90-day PHIBOR + 3%</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">1% over 91-day T-bill rate; 90-day PHIBOR + 3%</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">1% over 91-day T-bill rate; 90-day PHIBOR + 3%</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">1% over 91-day T-bill rate</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-left:13.5pt;text-align:right;
 text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right: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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right: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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' 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 1.5pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' 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 1.5pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>2,8</b><b>29</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;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>159,</b><b>397</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;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>161,886</b></p>
 </td>
 </tr>
 <tr>
 <td   colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom 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>
 <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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' 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='margin-right:.6pt;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='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='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='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0"><i>Interest
 rate swap (fixed to floating)</i></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>
 <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>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' 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=right style='margin-right:.6pt;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:.6pt;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='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='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='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">U.S. Dollar (US$125 million)</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:right' style="margin-top:0;margin-bottom:0">(62)</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:right' style="margin-top:0;margin-bottom:0">(3,468)</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:right' style="margin-top:0;margin-bottom:0">(3,468)</p>
 </td>
 </tr>
 <tr>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Fixed Rate on US$ notional </p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">11.375%</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">11.375%</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">11.375%</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">11.375%</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">11.375%</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Variable Rate on JPY notional</p>
 </td>
 <td   colspan=4 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">8.11% over LIBOR</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">8.11% over LIBOR</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">8.11% over LIBOR</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">8.11% over LIBOR</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6pt;text-align:right' style="margin-top:0;margin-bottom:0">8.11% over LIBOR</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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 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="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='page-break-after:auto' 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' style="margin-top:0;margin-bottom:0">&nbsp;</p>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt' 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 at December 31, 2005, total restructured long-term debt of
Piltel amounted to Php6,787 million, with maturities of up to June 14, 2016.
As at December 31, 2005, Piltel had an aggregate principal amount of Php49
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">As at December 31, 2005, Piltel
is 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).  Accordingly, the amount was presented as part of current
portion of interest-bearing financial liabilities.  See <i>Note 12 &#150;
Interest-bearing Financial Liabilities</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">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,
2005, 2004, 2003 and 2002.  As at 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 Php6 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"><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='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">None.</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779257"></a><a name="_Toc46082319">&nbsp;</a></p>

<p style="margin-top:0;margin-bottom:0">Item 15.     Controls and
Procedures</p>

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

<p style="margin-top:0;margin-bottom:0">Our management, with the
participation of our principal executive officer and principal financial
officer, carried out an evaluation on 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 at December 31, 2005.  Based on
this evaluation, our chief executive officer and principal financial officer
concluded that our disclosure controls and procedures were effective as at December 31, 2005.</p>

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

<p style="margin-top:0;margin-bottom:0">During 2005, 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.  However, 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, Ms. Corazon de la Paz, as Audit Committee advisor 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 a Senior Partner of Joaquin
Cunanan &amp; Company (a member firm of PricewaterhouseCoopers Worldwide), Ms. 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='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a name="_Toc75779259">Item 16B.  Code of Business Conduct and Ethics</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">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='page-break-after:avoid' 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;&nbsp;
Compliance with applicable laws,
rules and regulations;</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;&nbsp;
Ethical handling of conflicts of
interest, corporate opportunities and confidential information;</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">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Protection and proper use of our
assets;</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">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fair dealing with our employees,
customers, service providers, suppliers and competitors;</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">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Compliance with our reporting and
disclosure obligations to the relevant regulators and the investors;</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">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Compliance with our disclosure and
financial reporting controls and procedures;</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">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assessment and management of risks
involved in our business endeavours; and</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">8.&nbsp;&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='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Corporate Governance</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">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 Philippine 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 Philippine 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;&nbsp;
The qualifications and grounds for
disqualification for directorship;</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;&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;&nbsp;
The duties and responsibilities of
our board of directors and the individual 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">4.&nbsp;&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-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;&nbsp;
The role of our chairman in
ensuring compliance with the corporate governance principles;</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">6.&nbsp;&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-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;&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;&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-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;&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;&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;&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;&nbsp;&nbsp;
The penalties for violations of
our Governance Manual.</p>

<p 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">We
have summarized in our website the differences between our corporate government
practices and those required of U.S. listed companies under NYSE Section
303A.11.  Please refer to:</p>

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

<p style="margin-top:0;margin-bottom:0">http://www.pldt.com.ph/download/pldt-corpgov_manual.pdf
OR <br>
http://www.pldt.com.ph/cgov/downloads/pldt-corpgov_manual.pdf</p>

<p style="margin-top:0;margin-bottom:0">http://www.pldt.com.ph/download/pldt-code_ethics.pdf
OR http://www.pldt.com.ph/cgov/downloads/Code%20of%20Ethics(BD_APPRVD)-03.30,04</p>

<p style="margin-top:0;margin-bottom:0">http://www.pldt.com.ph/download/pldt-disclosure.pdf
OR <br>
http://www.pldt.com.ph/cgov/downloads/NYSE-PLDT_CG-DISC-07.01.pdf</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>Chief 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 chief 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 governance and 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, Governance and Nomination, Executive
Compensation and Finance Committees&#148; for further details.</p>

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

<p style="margin-top:0;margin-bottom:0"><i>Internal Audit
Organization</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 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;&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;&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;&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;&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;&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;&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;&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;&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;&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;&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;&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;&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="margin-top:0;margin-bottom:0"><a name="OLE_LINK28"></a><a name="OLE_LINK27"><i>Policy on Employee Disclosure of Questionable
Accounting or Auditing Matters</i></a></p>

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

<p 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 chief governance
officer, Rene G. Banez<i>, </i>with e-mail address<i> rgbanez@pldt.com.ph </i>or
telephone number <br>
+632-816-8917.  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='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a name="_Toc75779260">Item 16C.  Principal Accountant Fees and Services</a></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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table
summarizes the fees paid for services billed by our external auditors for the
fiscal years ended December 31, 2005 and 2004:</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='margin-left:45.9pt;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=' 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>2005</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>2004</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=3 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">(in millions)</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>
 <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=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Audit Fees</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">Php38.1</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">&nbsp;</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">Php29.4</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">Tax Fees</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">1.0</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">5.3</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">All Other Fees</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">10.5</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">&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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4.3</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"><b>Total</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='text-align:right' style="margin-top:0;margin-bottom:0"><b>Php49.6</b></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"><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='text-align:right' style="margin-top:0;margin-bottom:0"><b>Php39.0</b></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"><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.  </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"><i>Tax Services</i>.  This category includes tax compliance, tax advice and
tax planning services performed by our independent auditors.</p>

<p style='text-indent:.5in;line-height:8.0pt' 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>All Other Fees</i>.  This category consists primarily
of fees for consultation with respect to our IAS adoption, Sarbanes-Oxley Act
404 compliance initiatives, risk management review in respect of Smart&#146;s
information infrastructure and due diligence review for certain projects.</p>

<p style='text-indent:.5in;line-height:8.0pt' 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 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='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">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='text-indent:.5in;line-height:8.0pt' 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='text-indent:.5in' 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='line-height:8.0pt' 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="margin-top:0;margin-bottom:0"><a name="_Toc75779263">PART
III</a></p>

<p style='page-break-after:auto !msorm;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a
name="_Toc46082322"></a><a name="_Toc75779264">&nbsp;</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Item
17.     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">Not applicable.</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"><a name="_Toc75779265">Item 18.     Financial Statements</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">Index
to Financial Statements</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='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"><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;page-break-after:avoid' 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;
 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-bottom:3.0pt;page-break-after:avoid' 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">150</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:3.0pt;line-height:normal' style="margin-top:0;margin-bottom:0">Balance Sheets as at December 31, 2005 and 2004</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">151</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, 2005, 2004 and 2003</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">152</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, 2005, 2004 and 2003</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">153</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, 2005, 2004 and 2003</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">154</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">155</p>
 </td>
 </tr>
</table></center></div>

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

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779266">Item 19.     Exhibits</a></p>

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

<p 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='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">Exhibits
to this report:</p>

<p style='line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></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:99.66%;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(a).</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 (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 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">1(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">By-Laws (as amended on June 28, 2005)</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'>
 <tr style='page-break-inside:avoid'>
 <td  colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <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>
 <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>
 <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>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <p align=center style='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 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">                /s/
 Ma. Lourdes C. Rausa-Chan</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=' border:none;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 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'>
 <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=center style='margin-right:.1in;text-align:center' 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'>
 <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=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 29, 2006</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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">By-Laws (as amended on June 28, 2005) </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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:0in;margin-bottom:.0001pt;line-height:normal' 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 align=center style='text-align:center' style="margin-top:0;margin-bottom:0">4(d)</p>
 </td>
 <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">The Cooperation Agreement, dated January
 31, 2006, entered into by and among PLDT, First Pacific, Metro Pacific
 Corporation, Metro Asia Link Holdings, Inc., Metro Pacific Resources, Inc.,
 Larouge B.V., Metro Pacific Assets Holdings, Inc., NTT Communications and
 DoCoMo (incorporated by reference to
 Schedule 13D/A (Amendment No.2) filed with the United States Securities and
 Exchange Commission by Nippon Telegraph and Telephone Corporation and NTT
 Communications Corporation on January 31, 2006) </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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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:#E0E0E0;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' 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' style="margin-top:0;margin-bottom:0"><b>EXHIBIT 1(b)</b></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=' 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>
 <p style="margin-top:0;margin-bottom:0">Adopted January</p>
 <p style="margin-top:0;margin-bottom:0">Amended April</p>
 <p style="margin-top:0;margin-bottom:0">Amended January</p>
 <p style="margin-top:0;margin-bottom:0">Amended April</p>
 <p style="margin-top:0;margin-bottom:0">Amended April</p>
 <p style="margin-top:0;margin-bottom:0">Amended July</p>
 <p style="margin-top:0;margin-bottom:0">Amended May</p>
 <p style="margin-top:0;margin-bottom:0">Amended January</p>
 <p style="margin-top:0;margin-bottom:0">Amended July</p>
 <p style="margin-top:0;margin-bottom:0">Amended January</p>
 <p style="margin-top:0;margin-bottom:0">Amended January</p>
 <p style="margin-top:0;margin-bottom:0">Amended June</p>
 <p style="margin-top:0;margin-bottom:0">Amended July</p>
 <p style="margin-top:0;margin-bottom:0">Amended April</p>
 <p style="margin-top:0;margin-bottom:0">Amended January</p>
 <p style="margin-top:0;margin-bottom:0">Amended March</p>
 <p style="margin-top:0;margin-bottom:0">Amended February</p>
 <p style="margin-top:0;margin-bottom:0">Amended February</p>
 <p style="margin-top:0;margin-bottom:0">Amended March</p>
 <p style="margin-top:0;margin-bottom:0">Amended February</p>
 <p style="margin-top:0;margin-bottom:0">Amended January</p>
 <p style="margin-top:0;margin-bottom:0"><b>Amended June</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p style="margin-top:0;margin-bottom:0">10,</p>
 <p style="margin-top:0;margin-bottom:0">26,</p>
 <p style="margin-top:0;margin-bottom:0">05,</p>
 <p style="margin-top:0;margin-bottom:0">16,</p>
 <p style="margin-top:0;margin-bottom:0">15,</p>
 <p style="margin-top:0;margin-bottom:0">26,</p>
 <p style="margin-top:0;margin-bottom:0">08,</p>
 <p style="margin-top:0;margin-bottom:0">27,</p>
 <p style="margin-top:0;margin-bottom:0">25,</p>
 <p style="margin-top:0;margin-bottom:0">10,</p>
 <p style="margin-top:0;margin-bottom:0">30,</p>
 <p style="margin-top:0;margin-bottom:0">25,</p>
 <p style="margin-top:0;margin-bottom:0">11,</p>
 <p style="margin-top:0;margin-bottom:0">18,</p>
 <p style="margin-top:0;margin-bottom:0">25,</p>
 <p style="margin-top:0;margin-bottom:0">29,</p>
 <p style="margin-top:0;margin-bottom:0">24,</p>
 <p style="margin-top:0;margin-bottom:0">29,</p>
 <p style="margin-top:0;margin-bottom:0">29,</p>
 <p style="margin-top:0;margin-bottom:0">26,</p>
 <p style="margin-top:0;margin-bottom:0">25,</p>
 <p style="margin-top:0;margin-bottom:0"><b>28</b>,</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p style="margin-top:0;margin-bottom:0">1938</p>
 <p style="margin-top:0;margin-bottom:0">1939</p>
 <p style="margin-top:0;margin-bottom:0">1940</p>
 <p style="margin-top:0;margin-bottom:0">1947</p>
 <p style="margin-top:0;margin-bottom:0">1953</p>
 <p style="margin-top:0;margin-bottom:0">1955</p>
 <p style="margin-top:0;margin-bottom:0">1962</p>
 <p style="margin-top:0;margin-bottom:0">1964</p>
 <p style="margin-top:0;margin-bottom:0">1966</p>
 <p style="margin-top:0;margin-bottom:0">1968</p>
 <p style="margin-top:0;margin-bottom:0">1968</p>
 <p style="margin-top:0;margin-bottom:0">1968</p>
 <p style="margin-top:0;margin-bottom:0">1969</p>
 <p style="margin-top:0;margin-bottom:0">1979</p>
 <p style="margin-top:0;margin-bottom:0">1983</p>
 <p style="margin-top:0;margin-bottom:0">1983</p>
 <p style="margin-top:0;margin-bottom:0">1998</p>
 <p style="margin-top:0;margin-bottom:0">2000</p>
 <p style="margin-top:0;margin-bottom:0">2001</p>
 <p style="margin-top:0;margin-bottom:0">2003</p>
 <p style="margin-top:0;margin-bottom:0">2005</p>
 <p style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
</table></center></div>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

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

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">PHILIPPINE
LONG DISTANCE TELEPHONE COMPANY</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">AMENDED
BY - LAWS</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">ARTICLE
I</p>

<p style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">OFFICE</h1>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  The principal office of the corporation shall be in Metro Manila, Philippines.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on June 25, 1968 and February 29, 2000)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">ARTICLE ii</h1>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">MEETINGS</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  The annual meeting of the 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, at 4 o&#146;clock P.M. The Board of Directors may, for good cause, postpone the annual meeting of
stockholders to a reasonable date. </p>

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

<p style='margin-left:0in;text-align:justify;
text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">Written or printed notice of every annual stockholders&#146; meeting, which
notice shall state the date, time and place of the meeting and the purpose or
purposes for which the meeting is called, shall be given by the Secretary or by
the Assistant Secretary to each stockholder.  Such notice may be delivered to
the stockholders personally, or enclosed in an envelope with the postage
thereon fully prepaid, addressed to each stockholder at his or her last known
place of residence or business, and posted at a Post Office in the Philippines or in the United States of America.  Such delivery or mailing of notice must be made at
least fifteen (15) business days before the date fixed for the meeting.  No
publication of notice of any regular or special meeting of stockholders in the
public newspapers shall be required.</p>

<p align=center style='margin-right:3.25pt;text-align:center;
line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended on July 26, 1955, February 24, 1998 and March 29, 2001)</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 2.
Special meetings of the stockholders may be called at any time by the President
or three (3) of the Directors or by any number of stockholders representing
two-thirds (2/3) of the subscribed capital stock.  Notice in writing of such
meeting, stating the date, time and place thereof, and the purpose or purposes
for which such meeting is called 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 the
said meeting.  Such notice may be delivered to the stockholders personally or
enclosed in an envelope and addressed, with the postage thereon fully prepaid,
to each stockholder at his or her last known place of residence or business and
posted at a Post Office in the Philippines or the United States of America.
Such delivery or mailing of notice must be made at least fifteen (15) business
days before the date fixed for the meeting and the statement of service by such
delivery or mailing shall be entered upon the minutes of meeting and the said
minutes upon being read and approved at a subsequent meeting of the
stockholders shall be conclusive on the question of service.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on July 26, 1955, February 24, 1998 and March 29, 2001)</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
3.  Every meeting of the stockholders shall be presided by the President or, in
his absence, by a chairman to be chosen by the stockholders representing a
majority of the shares of the corporation issued and outstanding and entitled
to vote present or duly represented at said meeting.  The Secretary or, in his
absence, the Assistant Secretary, shall act as secretary of every meeting but
if neither the Secretary nor the Assistant Secretary is present, the chairman
of the meeting shall appoint a secretary of the meeting.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*New
provision adopted on March 29, 2001)</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
4.  A meeting of the Board of Directors shall be held promptly after the
adjournment of the annual meeting of the stockholders; subsequent regular
meetings shall be held monthly on the last Tuesday of each month at 9:30 A. M.,
at the office of the corporation in Metro Manila, Philippines or such other
time and place in or outside the Philippines as the Board of Directors may from
time to time determine.  Special meetings may be called by the President
whenever he may think proper, and he shall forthwith call such meetings
whenever requested in writing to do so by any three (3) Directors.  Such
meetings shall be called for a date not later than seven (7) days from the date
of such request.  Notice in writing of every special meeting of the Board of
Directors, stating the date and place thereof and the purpose or purposes for
which the meeting is called, shall be given to each Director by the Secretary
or Assistant Secretary, or in case of his absence, inability, refusal or
neglect to act, by any person appointed for that purpose by the President or
three (3) of the Directors.  Such notice may be delivered to each Director
personally, by telegraph, facsimile, e-mail, or other means of written or
printed communication generally accepted and used by the business community as
at present available or be made available through technical advances or
innovations in the future, at least twenty-four (24) hours previous to the time
fixed for the meeting, or may be given by enclosing a notice in an envelope,
with the postage thereon fully prepaid, addressed to each Director at his last
known place of residence or business and posted at least three (3) days before
the date fixed for the meeting.  Service of notice, by delivery, telegraph,
facsimile, e-mail, or other means of written or printed communication generally
accepted and used by the business community as at present available or be made
available through technical advances or innovations in the future, shall be
entered upon the minutes of the meeting, and said minutes, upon being read and
approved at a subsequent meeting of the Board, shall be conclusive upon the
question of service.  Notice of regular meetings of the Board of Directors is
hereby dispensed with.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on January 5, 1940, May 8, 1962, January 30, 1968,</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">July 11, 1969, February 24, 1998, February 29, 2000 and March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 5.   Every
meeting of the Board of Directors shall be presided by the Chairman of the
Board or, in his absence, the President, or in his absence, by any Director
chosen by majority of the members of the Board present at such meeting at which
there is a quorum.  The Secretary or, in his absence, the Assistant Secretary,
shall act as secretary of every meeting but if neither the Secretary nor the
Assistant Secretary is present, the chairman of the meeting shall appoint a
secretary of the meeting.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*New
provision adopted on March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 6.  If any
regular meeting of stockholders or Board of Directors provided for herein shall
fall on a legal holiday, then such meeting shall be held on the next succeeding
business day at the same hour; but special meetings of the stockholders or
Directors may be held upon a holiday with the same force and effect as if held
upon a business day.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
7.  Meetings of the 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.
Meetings of the Board of Directors shall be held at the principal office of the
corporation or at such other place in or outside the Philippines as the Board,
from time to time, may determine.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on May 8, 1962, July 11, 1969, February 29, 2000 and March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">ARTICLE
III</p>

<p style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">QUORUM AND
VOTING REQUIREMENTS</h1>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  At any meeting of the stockholders, persons representing, in person or by
proxy, a majority of the shares of the corporation issued and outstanding and
entitled to vote at the said meeting shall constitute a quorum for the
transaction of any business, except as otherwise provided by law.  In the
absence of a quorum, the President or, in his absence, any person entitled to
preside or act as secretary of the meeting shall have the power to adjourn the
meeting from time to time until the requisite number of shares to constitute a
quorum is present or represented. When a meeting of the stockholders is
adjourned to another time or place, it shall not be necessary to give notice of
the adjourned meeting if the time and place to which the meeting is adjourned
are announced at the meeting at which the adjournment was taken.  At the
reconvened meeting, any business may be transacted that could have been
transacted on the original date of the meeting.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on March 29, 1983 and March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 2.  At any
meeting of the stockholders at which there is quorum, all matters approved by
the stockholders representing a majority of the issued and outstanding shares
of the corporation entitled to vote present in person or by proxy at such meeting
shall be valid as a corporate act, except for such matters which require the
vote of the stockholders representing a higher percentage of the outstanding
shares as prescribed by statute or these By-Laws.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*New
provision adopted on March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0"> </p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
3.  Each stockholder is entitled to one vote for each share of stock held by
him, where such stock has voting rights on the matter under consideration, and
such stock may be represented by the holder thereof or by his attorney duly
authorized by proxy executed 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 the corporation at least
two <br>
(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 <br>
(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.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on March 29, 1983, February 24, 1998 and March 29, 2001)</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
4.  At every election of Directors, each holder of stock which has voting
rights for the election of Directors is entitled to one vote for each share of
such stock held by him for as many persons as there are Directors to be
elected, or to cumulate said shares and give one (1) candidate as many votes as
the number of Directors multiplied by the number of his share shall equal, or
to distribute such votes on the same principle among as many candidates as he
shall think fit.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*
Amended on March 29, 1983, February 24, 1998 and March 29, 2001)</p>

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

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 5.  The
Board of Directors shall have the power to close the stock transfer books of
the corporation for the following periods:  (a) not exceeding sixty (60) days
preceding the date of any meeting of stockholders or the date for the allotment
of rights or the date when any change or conversion or exchange of capital
stock shall go into effect or a date in connection with obtaining the consent
of stockholders for any purpose; and (b) not exceeding forty five (45) days
preceding the date of payment of any dividend; provided, however, that in lieu
of closing the stock transfer books as aforesaid, the Board of Directors may
fix in advance a date as follows:  (a) not exceeding sixty (60) days preceding
the date for any meeting of stockholders or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, or a date in connection with obtaining such consent; and
(b) not exceeding forty five (45) days preceding the date of payment of any
dividend; as a record date for the determination of the stockholders entitled
to notice of, and to vote at, any such meeting, and any adjournment thereof, or
to any such allotment of rights, or to exercise the rights in respect of any
such change, conversion or exchange of capital stock, or to give such consent,
or entitled to receive payment of any such dividend, and in such case, such
stockholders, and only such stockholders as shall be stockholders of record on
the date so fixed, shall be entitled to such notice of, and to vote at, such
meeting, and any adjournment thereof, or to receive such allotment of rights,
or to exercise such rights, or to give such consent, or to receive payment of
such dividend, as the case may be, notwithstanding any transfer of any stock on
the books of the corporation after any such record date fixed as aforesaid.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on July 26, 1955, February 24, 1998 and March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 6.  At any
meeting of the Board of Directors, a majority of the number of the Directors as
specified in the Articles of Incorporation shall constitute a quorum for the
transaction of business.  In the absence of a quorum, a majority of the
Directors present may adjourn any meeting from time to time until a quorum be
had.  Notice of any adjourned meeting need not be given.</p>

<p align=center style='text-align:center;line-height:150%;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">(*New
provision adopted on March 29, 2001)</p>

<p style='line-height:150%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 7.  At any meeting of the Board of Directors at
which there is a quorum, all matters approved by at least a majority of the
Directors present at such meeting shall be valid as a corporate act, except for
such matters which require the vote of majority of all the members of the Board
as prescribed by statute or these By-Laws.  </p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">(*New provision adopted on March 29, 2001)</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:150%;page-break-after:
auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">ARTICLE IV</h1>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">CAPITAL
STOCK</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  The certificate of stock shall be in such form and device as may be
prescribed by the Board of Directors from time to time.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on April 15, 1953)</p>

<p style='line-height:150%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
2.  The person, firm or corporation in whose name the stock stands on the books
of the corporation, whether individually or as trustee, pledgee, or otherwise,
may be recognized and treated by the corporation as the absolute owner of the
stock, and the corporation shall in no event be obliged to deal with or to
recognize the rights or interests of other persons in such stock or in any part
thereof.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on April 15, 1953)</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
3.  Certificates shall be issued in the manner prescribed by law to each
stockholder, showing the number of shares to which he is entitled; and said
certificates, and the shares named therein shall be transferable only upon the
books of the corporation by the shareholder named in the certificate, or his
duly authorized attorney or representative.  The Board of Directors shall
appoint one or more registration agents of the corporation and no certificate
for any share of stock shall be delivered to any stockholder until there is
endorsed thereon a certificate of one of the registrars, showing such
certificate to have been duly registered.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on April 15, 1953)</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
4.  No new certificates of any share shall be issued until the old certificate,
representing the same, has been surrendered and cancelled; provided, however,
that in case of lost, stolen or destroyed certificates of stock, the following
procedure shall be followed for the issuance by the corporation of new
certificates in lieu of those lost, stolen or destroyed:</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(a)
The registered owner of certificates of stock in this corporation or his legal
representative shall file an affidavit, in triplicate, with this corporation
setting forth, if possible, the circumstances as to how, when and where said
certificates were lost, stolen or destroyed, the number of shares represented
by each certificate and the serial number of the certificates.  He shall submit
such other information and evidence which he may deem necessary.</p>

<p style='line-height:15.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(b)
After verifying the affidavit and other information and evidence with the books
of this corporation, this corporation shall publish a notice, in a newspaper of
general circulation in the Philippines published in the place where this
corporation has its principal office, once a week for three <br>
(3) consecutive weeks, at the expense of the registered owner of the
certificates of stock which have been lost, stolen or destroyed.  The notice
shall state the name of this corporation, the name of the registered owner and
the serial number of said certificates, and the number of shares represented by
each certificate, and that after the expiration of one (1) year from the date
of the last publication, if no contest has been presented to this corporation
regarding said certificates of stock, the right to make such contest shall be
barred and this corporation shall cancel in its books the certificates of stock
which have been lost, stolen or destroyed and issue in lieu thereof new
certificates of stock, unless the registered owner files a bond or other
security in lieu thereof as may be required running for a period of one (1)
year for a sum and in such forms and with such sureties as may be satisfactory
to the Board of Directors, in which case a new certificate may be issued even
before the expiration of the one (1) year period provided herein:  Provided,
That if a contest has been presented to this corporation or if an action is
pending in court regarding the ownership of said certificates of stock which
have been lost, stolen or destroyed, the issuance of the new certificates of
stock in lieu thereof shall be suspended until final decision by the court
regarding the ownership of said certificates of stock.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on April 15, 1953 and January 25, 2005)</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
5.  Certificates of stock shall be signed by the President or Vice President
and the Secretary or an Assistant Secretary of the corporation and sealed with
the corporate seal; provided, however, that where any such certificate is
signed by a transfer agent and by a registrar, the signatures of any such
President, Vice President, Secretary or Assistant Secretary and the seal of the
corporation upon such certificate may be facsimiles, engraved or printed.  In
case any officer or officers who have signed, or whose facsimile signature or
signatures have been used on, any such certificate or certificates shall cease
to be such officer or officers of the corporation, whether because of death,
resignation or otherwise, before such certificate or certificates have been
delivered by the corporation, such certificate or certificates may nevertheless
be adopted by the corporation and be issued and delivered as though the person
or persons who signed such certificate or certificates or whose facsimile
signature or signatures have been used thereon had not ceased to be such
officer or officers of the corporation.  A transfer agent of the corporation
may sign certificates of stock by facsimile signature provided the use thereof
is permitted by the stock exchange on which the corporation&#146;s stock is listed
and by the corporation&#146;s other transfer agents.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on April 15, 1953, July 26, 1955 and July 11, 1969)</p>

<p style='line-height:15.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
6.  The corporation shall not issue any stock certificate evidencing, either
singly, or with other shares, any fractional part of a share, or any undivided
interest in any share.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on April 15, 1953)</p>

<p align=center style='text-align:center;line-height:14.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">ARTICLE
V</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">DIRECTORS</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  The Board of Directors shall consist of thirteen (13) members, each of whom
must hold at least one (1) share of the stock of the corporation in his own
name on the books of the corporation.  Directors shall be elected from among
the stockholders at their annual meeting or at any meeting held in lieu thereof
for that purpose.  Each Director shall hold office until the annual meeting of
stockholders held next after his election and until his successor shall have
been elected and qualified, except in case of death, resignation,
disqualification or removal from office.</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">There
shall be at least two (2) Independent Directors or such Independent Directors
as shall constitute at least twenty percent (20%) of the members of the Board
of Directors, whichever is lesser.  An &#147;Independent Director&#148; is a director
independent of management and who, apart from his fees and shareholdings, is
free from any business or other relationship with the corporation which could,
or could reasonably be perceived to, materially interfere with his exercise of
independent judgment in carrying out his responsibilities as a director of the
corporation and includes, among other persons, one who:</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.5in;line-height:
150%' style="margin-top:0;margin-bottom:0">(a)        is not a director or officer
of the corporation or any of its related companies or any of its substantial
shareholders (other than as an Independent Director of any of the foregoing);</p>

<p style='margin-left:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.5in;line-height:
150%' style="margin-top:0;margin-bottom:0">(b)        is not a substantial
shareholder of the corporation or any of its related companies or any of its
substantial shareholders;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(c)        is not a relative of any director, officer
or substantial shareholder of the corporation, or any of its related companies
or any of its substantial shareholders.  For this purpose, &#147;relatives&#148; includes
spouse, parent, child, brother, sister, and the spouse of such child, brother
or sister;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(d)        is not acting as a nominee or representative
of any director, or officer or substantial shareholder of the corporation, or
any of its related companies or any of its substantial shareholders;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(e)        has not been employed in any executive
capacity by the corporation, or any of its related companies or any of its
substantial shareholders within the last five (5) years;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(f)        is not retained, or within the last five (5)
years has not been retained, as a professional adviser by the corporation, or
any of its related companies or any of its substantial shareholders, either
personally or through his firm;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(g)        has not engaged and does not engage in any
transaction with the corporation or with any of its related companies or with
any of its substantial shareholders, whether by himself or with other persons or
through a firm of which he is a partner or a company of which he is a director
or substantial shareholder, other than the transactions which are conducted at
arm&#146;s length and are immaterial;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(h)        is not employed as an officer or executive
of another entity where any of the corporation&#146;s officers or executives serves
on that entity&#146;s Compensation Committee; or</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(i)         is not affiliated with or employed by or,
within the last five (5) years, has not been affiliated with or employed by the
corporation&#146;s present or former external auditors or their affiliates.</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style='text-align:justify;text-indent:.5in;line-height:
150%' style="margin-top:0;margin-bottom:0">When used in relation to a Company,
&#147;related company&#148; means another company which is: (i) its holding company, (ii)
its subsidiary, or (iii) a subsidiary of its holding company; and &#147;substantial
shareholder&#148; means any person who is directly or indirectly the beneficial
owner of more than ten percent (10%) of any class of its equity security.</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;line-height:
150%' style="margin-top:0;margin-bottom:0">  A Director or any person nominated for
election to the Board of Directors must possess the following minimum qualifications
as determined by the Nomination Committee or any other committee constituted by
the Board of Directors that, by its charter as approved by the Board of
Directors, is vested with the duties and responsibilities of a nomination
committee:</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>

<p style='margin-left:1.0in;text-indent:-.5in;line-height:
150%' style="margin-top:0;margin-bottom:0">(a)        at least a college graduate,
or in the absence of such college degree or formal education, sufficient
experience in managing a business;</p>

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

<p style='margin-left:1.0in;text-indent:-.5in' style="margin-top:0;margin-bottom:0">(b)        at least twenty-one (21) years old;</p>

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

<p style='margin-left:.5in;text-align:justify' style="margin-top:0;margin-bottom:0">(c)        proven
integrity and probity; and</p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in' style="margin-top:0;margin-bottom:0">(d)        assiduousness in the performance of duties. </p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style='margin-left:0in;text-indent:.5in;line-height:
150%' style="margin-top:0;margin-bottom:0">No person shall qualify
or be eligible for nomination or election to the Board of Directors if he is
engaged in any business that competes with or is antagonistic to that of the
corporation or its subsidiaries.  Without limiting the generality of the
foregoing, a person shall be deemed to be so engaged:</p>

<p style='text-align:justify;text-indent:.5in;line-height:14.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-align:justify;
text-indent:-.5in;line-height:150%;punctuation-wrap:hanging;text-autospace:
ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If he is an employee, officer, manager or controlling person, or the
owner (either of record or beneficially) of ten per cent (10%) or more of any
outstanding class of shares, of any corporation (other than one in which this
corporation owns at least thirty per cent (30%) of the capital stock) or entity
engaged in a business that the Board of Directors, by at least a majority vote,
determines to be competitive or antagonistic to that of this corporation or any
of its subsidiaries; or</p>

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

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If he is an employee, officer, manager or controlling person, or the
owner (either of record or beneficially) of ten per cent (10%) or more of any
outstanding class of shares, of any corporation or entity engaged in any line
of business of this corporation or any of its subsidiaries, when in the<u> </u>judgment
of the Board of Directors, by at least a majority vote, the laws against
combinations and restraint of trade shall be violated by such person&#146;s
membership in the Board of Directors; or</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the Board of Directors, in the exercise of its judgment in good
faith, determines, by at least a majority vote, that he is a nominee of any
person set forth in (i) and (ii) above.</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.2in;
margin-bottom:.0001pt;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">In determining whether or not a person is a
controlling person, beneficial owner, or the nominee of another, the Board of
Directors may take into account such factors as business and family
relationships.</h3>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.2in;
margin-bottom:.0001pt;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h3>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.2in;
margin-bottom:.0001pt;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">In addition, no person shall qualify or be eligible
for nomination or election to the Board of Directors if he is suffering from
any of the following grounds for disqualification:</h3>

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

<p style='margin-left:1.0in;text-indent:-.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(a)        conviction
by final judgment of an offense involving moral turpitude or similar fraudulent
acts or transgressions;</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(b)        conviction by final judgment of an offense
punishable by imprisonment for a period exceeding six (6) years, or a violation
of the Corporation Code committed within five <br>
(5) years prior to the date of election as a director;</p>

<p style='margin-left:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">(c)        judicial
declaration of bankruptcy or insolvency;</p>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:1.0in;
margin-bottom:.0001pt;text-indent:-.5in;line-height:150%;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">(d)        final finding by the Philippine
Securities and Exchange Commission (Commission) or a Philippine court or
administrative body or other regulatory authority of competent jurisdiction of
having willfully violated, or willfully aided, abetted, counseled, induced or
procured the violation of, any provision of the Securities Regulations Code,
the Corporation Code or any other laws administered by the Commission or Bangko
Sentral ng Pilipinas (BSP), or any rule, regulation or order of the Commission
or BSP; and</h3>

<p style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:0in;line-height:
150%' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h3>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:1.0in;
margin-bottom:.0001pt;text-indent:-.5in;line-height:150%' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">(e)        final finding by a foreign court or
administrative body or other regulatory authority of competent jurisdiction of
having committed the acts listed in the preceding clause (d) in violation of
the applicable laws, rules or regulations of the relevant foreign jurisdiction.</h3>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.2in;
margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h3>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">            Except
as otherwise provided in the preceding paragraphs, the Nomination Committee or
any other committee constituted by the Board of Directors that, by its charter
as approved by the Board of Directors, is vested with the duties and
responsibilities of a nomination committee shall have the power and authority
to evaluate and decide whether any person nominated for election as a Director
has all the qualifications and none of the disqualifications specified in the
preceding paragraphs.  The Nomination Committee or any other committee
constituted by the Board of Directors that, by its charter as approved by the
Board of Directors, is vested with the duties and responsibilities of a
nomination committee shall also have the power and authority to determine such<b>
</b>other criteria for qualification and disqualification of Directors or
persons nominated for election to the Board of Directors, including grounds for
temporary disqualification of Directors.</p>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h3>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">For the proper implementation of this provisions of this Section, all nominations for election of directors by the stockholders shall
be submitted in writing to the Board of Directors through the President and the
Secretary at this corporation&#146;s principal place of business at least sixty (60)
working days before the regular or special meeting of stockholders for the
purpose of electing directors.</h3>

<p align=center style='margin:0in;margin-bottom:.0001pt;text-align:center;
text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">(*Amended
on May 8, 1962, February 29, 2000 and March 29, 2001, February 26, 2003 and January 25, 2005)</h3>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
2.  In case of any vacancy in the Board of Directors for any cause or reason
whatsoever, other than removal by the stockholders or by expiration of the term
of office, the vacancy may be filled by the vote of at least a majority of the
remaining Directors then in office, if still constituting a quorum.  A Director
so elected to fill a vacancy shall hold office for the unexpired term of his
predecessor in office.  Any vacancy in the Board of Directors resulting from
the removal of a director by the stockholders in the manner provided by law may
be filled by election at the same meeting at which the removal took place or at
any annual or special meeting of stockholders called for the purpose after
giving notice as prescribed in these By-Laws.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on May 8, 1962, January 10, 1968 and March 29, 2001)</p>

<p align=center style='text-align:center;line-height:14.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
3.  The Board of Directors may create an Executive Committee to be composed of
not less than three (3) members of the Board of Directors to be appointed by
the Board of Directors.  Such committee shall, except as may otherwise be
provided by law, have and exercise all the powers of the Board of Directors
during the intervals between the meetings of the full Board.  Such committee
may prescribe rules for its governance; its meetings may be held at such place
within the Philippines as it may determine or authorize, and majority of the
members of said committee at any meeting shall constitute a quorum.  In
addition to taking action at a meeting, the Executive Committee may validly act
upon the written consent of a majority of its members.  At each meeting of the
Board of Directors, the acts and proceedings of the Executive Committee since
the preceding meeting of the Board of Directors shall be submitted for such
action thereon as the Board may deem proper.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0"> (*Amended
on May 8, 1962, January 10, 1968 and March 29, 2001)</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;line-height:150%;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">*          Section 4.  The
corporation will not speculate in its own or constituent companies&#146; securities,
or permit similar speculations by any of its constituent companies.</p>

<p style='text-align:justify;line-height:150%;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">*          Section 5.  The Board of Directors may create committees and
other bodies it may deem necessary or advisable in respect of the affairs of
the corporation.  The membership, powers, duties, functions and
responsibilities of such committees and bodies shall be prescribed by the Board
of Directors.  The members of such committees and bodies shall be appointed by
the Board of Directors for a term co-terminus with that of the Board of
Directors that appoints them unless sooner terminated or removed.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*New
provision effective February 24, 1998)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">ARTICLE
VI</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">OFFICERS</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  The officers of the corporation shall be a President, a Senior Executive Vice<b><u>
</u></b>President, one or more Executive Vice Presidents, one or more Senior
Vice Presidents, one or more First Vice Presidents, one or more Vice
Presidents, a Treasurer, one or more Assistant Treasurers, a Secretary, one or
more Assistant Secretaries, a Controller, and one or more Assistant
Controllers, all of whom shall be elected by the Board of Directors. </p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">Immediately
after the election of the Directors at the annual or special meeting called for
such purpose, the Board of Directors shall elect the officers of the
corporation.  The Board may also, in its discretion, elect a Chairman of the
Board.  Any two (2) or more positions may be held concurrently by the same
person, except that no one shall act as Chairman or President and Treasurer or
Secretary at the same time.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on May 8, 1962, January 27, 1964, July 25, 1966,</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">April 18, 1979, January 25, 1983, March 29, 2001 and January 25, 2005)</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">            Section
2.  The Board of Directors may appoint or elect such other officers as it shall
deem advisable, who shall, respectively, have such authority and perform such
duties as may be prescribed from time to time by the Board of Directors.</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">*          Section
3.  The term of office of all officers shall be co-terminus with that of the
Board of Directors that elects or appoints them except in case of death,
resignation, disqualification or removal from office.  </p>

<p align=center style='text-align:center;line-height:150%;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">(*New provision adopted on March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
4.  If any of the officers becomes vacant by reason of death, resignation,
failure to qualify, disqualification, removal from office or for any other
cause, the Board of Directors may elect a successor who shall hold office for
the unexpired term of his predecessor in office.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*New
provision adopted on March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">ARTICLE
VII</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">CHAIRMAN OF THE
BOARD, PRESIDENT, SENIOR EXECUTIVE VICE PRESIDENT, EXECUTIVE VICE PRESIDENTS,
SENIOR VICE PRESIDENTS, FIRST VICE PRESIDENTS, AND VICE PRESIDENTS</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  <u>Chairman of the Board.</u>  The Chairman of the Board (if there be one)
shall preside at all meetings of the Board of Directors.  He shall also
exercise such powers and perform such duties as the Board of Directors may
assign to him.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on April 26, 1939, April 16, 1947 and March 29, 2001)</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
2.  <u>President.</u>  The President, who must be a director, shall be the
chief executive officer of the corporation.  He shall have general care,
supervision and management of the business and affairs of the corporation,
subject to the control of the Board of Directors.  He shall exercise such
functions and perform all duties incident to the office of the President and
such other duties as may, from time to time, be assigned to him by the Board or
as prescribed in these By-Laws.  He shall see that all orders and resolutions of
the Board are carried into effect, subject, however, to the right of the Board
to delegate any specific powers, except such as may be by statute exclusively
conferred on the President, to any other officer or officers of the
corporation.  He shall preside at all the meetings of the stockholders and, in
the absence of the Chairman of the Board, preside at the meetings of the Board
of Directors.</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(*Amended on April 26, 1939, April 16, 1947, April 15, 1953 and March 29, 2001)</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
3.  <u>The Senior Executive Vice President, Executive Vice Presidents, Senior
Vice Presidents, First Vice Presidents, and Vice Presidents.</u>  In the case
of absence or disability of the President, the Senior Executive Vice President
shall act as President and in case of his absence or disability, the Board
shall designate any of the Executive Vice Presidents to act as President, and
perform the duties and exercise the powers of the President.  The Senior
Executive Vice President, Executive Vice Presidents, Senior Vice Presidents, First
Vice Presidents and Vice Presidents shall perform such duties as the Board
shall, from time to time, prescribe.</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(*Amended on April 26, 1969, January 27, 1964,</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">April 18, 1979 and January 25, 1983)</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">ARTICLE VIII</h1>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">SECRETARY
AND ASSISTANT SECRETARY</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  The Secretary shall make full and faithful record of the proceedings of all
meetings of the stockholders, Board of Directors and Executive Committee in
books to be kept for that purpose.  He shall give or cause to be given all
necessary notice of and materials for all meetings, have custody of the
corporate seal and affix it when authorized, preserve and keep all material
contracts, papers and documents, and keep or cause to be kept a list of all
stockholders.  The Secretary shall act as inspector at the election of
Directors and, as such, determine the number of shares of stock outstanding and
entitled to vote, the shares of stock represented at the meeting, the existence
of a quorum, the validity and effect of proxies, and receive votes, ballots and
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate votes, ballots, consents, determine
the results and do such acts as are proper to conduct the election or vote.
The Secretary may assign the exercise or performance of any or all of the
foregoing duties, powers and functions to any other person or persons, subject
always to his supervision and control.  The Secretary shall generally perform
such services and duties as are incident to his office and as the Board of
Directors or the President may, from time to time, prescribe or assign to him.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on March 29, 2001)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 2.  In the
absence or disability of the Secretary, the Assistant Secretary shall act in
his place and perform his duties.  The Assistant Secretary shall also perform
such other duties as may, from time to time, be delegated to him by the
Secretary and as the Board of Directors or the President may prescribe or
assign to him.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*New
provision adopted on March 29, 2001)</p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">ARTICLE IX</p>

<p align=center style='text-align:center;line-height:150%;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">TREASURER AND ASSISTANT TREASURER</p>

<p align=center style='text-align:center;line-height:150%;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">*          Section 1.  The Treasurer shall be the chief fiscal officer
of the corporation.  He shall discharge such duties and have such powers as the
Board of Directors or the President may prescribe or assign to him.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on March 29, 2001)</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:0in;
line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 2.  In the absence or disability of the
Treasurer, the Assistant Treasurer shall act in his place and perform his
duties.  The Assistant Treasurer shall also perform such other duties as may,
from time to time, be delegated to him by the Treasurer and as the Board of
Directors or the President may prescribe or assign to him.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*New
provision adopted on March 29, 2001)</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0"> ARTICLE
X</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">INDEMNIFICATION
OF DIRECTORS/OFFICERS</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;
line-height:150%' style="margin-top:0;margin-bottom:0">This corporation shall indemnify every director or officer,
his heirs, executors and administrators against all costs and expenses
reasonably incurred by such person in connection with any civil, criminal,
administrative or investigative action, suit or proceeding (other than an
action by this corporation) to which he may be, or is made, a party by reason
of his being or having been a director or officer of this corporation, except
in relation to matters as to which he shall be finally adjudged in such action,
suit or proceeding, to be liable for gross negligence, misconduct, or breach of
fiduciary duty.</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">In
the event of a settlement or compromise, indemnification shall be provided only
in connection with such matters covered by the settlement as to which this
corporation is advised by counsel that the person to be indemnified did not
commit a breach of duty as such director or officer.</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">The
amount payable by way of indemnity shall be determined and paid only pursuant
to a resolution adopted by a majority of all of the members of the Board of
Directors.</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;
line-height:150%' style="margin-top:0;margin-bottom:0">The costs and expenses incurred in defending the
aforementioned action, suit or proceeding may be paid by this corporation in
advance of the final disposition of such action, suit or proceeding, as
authorized in the manner provided for in the preceding paragraph, upon receipt
of an undertaking by or on behalf of the director or officer to repay such
amount, unless it shall ultimately be determined that he is entitled to be
indemnified by this corporation as authorized in this Article.</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%' style="margin-top:0;margin-bottom:0">(*New provision adopted on March 29, 2001)</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">*ARTICLE XI</p>

<p align=left style='margin-left:.5in;text-align:left;text-indent:135.0pt' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">INDEPENDENT AUDITOR</h4>

<p style='text-align:justify;line-height:150%;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0"><b>*          Section 1.  </b>The Audit Committee constituted by the Board of
Directors shall<b> be directly responsible for the appointment, compensation,
retention, removal or termination of engagement and oversight of </b>the
Independent Auditor<b>, including resolving disagreements between management
and the Independent Auditor regarding financial reporting and approving all
audit engagement fees and terms.</b></p>

<p align=center style='text-align:center;line-height:150%;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(Amended on June 28, 2005)</b></p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0"><b>*          Section 2.  At the regular meeting of the
Audit Committee immediately preceding the annual meeting of the stockholders of
the corporation, the Audit Committee shall appoint the Independent Auditor.  In
case of resignation, removal or termination of engagement of the Independent
Auditor, the Audit Committee shall, as soon as practicable, select and appoint
a replacement.</b></p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0"><b>(*New
provision adopted on June 28, 2005)</b></p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0"><b>*          Section
3.  The Independent Auditor or the lead, engagement or coordinating audit
partner having the primary responsibility for the audit or reviewing the audit
of the corporation&#146;s financial accounts shall be rotated after five (5) years
of service (with time of service counted from January 1, 2003) for a time out
period of at least five (5) years.</b></p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0"><b>(*New
provision adopted on June 28, 2005)</b></p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='line-height:150%' style="margin-top:0;margin-bottom:0"><b>*          Section
4.  The Independent Auditor shall report directly to the Audit Committee.</b></p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0"><b>(*New
provision adopted on June 28, 2005)</b></p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">ARTICLE
XII</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">BANKING
AND CONTRACTS</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  All moneys belonging to the corporation shall be deposited in such bank or
banks as may be, from time to time, designated by the Board of Directors and
shall be withdrawn only on checks of the corporation signed by such
officer/officers of the corporation or by such person/persons as may be, from
time to time, designated by the Board of Directors.  Promissory notes, bills of
exchange, trade acceptances, drafts and other negotiable instruments shall be
signed and/or drawn in the name of the corporation by such officer/officers of
the corporation or by such person/persons as may be, from time to time,
designated by the Board of Directors.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on January 25, 2005)</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
2.  All contracts, instruments or documents pertaining to transactions or
corporate actions authorized by the Board of Directors shall be signed in the
name of the corporation by such officer/officers of the corporation or by such
person/persons as may be, from time to time, designated by the Board of
Directors.  In the absence of any specific designation by the Board of
Directors, such contracts, instruments or documents shall be signed in the name
of the corporation by the President, or by any officer/officers or
executive/executives of the corporation or any person/persons duly authorized
by the President.  Contracts, instruments or documents to be entered into in
the ordinary course of business of the corporation which do not require the
approval of the Board of Directors may be signed by the President or by any
officer/officers or executive/executives of the corporation or any
person/persons duly designated by the President, or by such officer/officers or
executive/executives of the corporation or any person/persons duly authorized
for such purpose under administrative orders approved by the President and in
effect at the relevant time.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on March 29, 2001 and January 25, 2005)</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">ARTICLE XIII</p>

<p style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">FISCAL YEAR</h6>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
1.  The fiscal year in the business of the corporation shall be the calendar
year, extending from January first to December thirty-first inclusive, in each
year.</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-align:justify;
text-indent:0in;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section 2.  The corporation shall submit to the stockholders
at least fifteen (15) business days prior to the annual meeting, a financial
report of the operations of the corporation for the preceding<b> </b>year,
which shall include financial statements, duly signed and certified by the
corporation&#146;s Independent Auditor. </p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on February 24, 1998, March 29, 2001, July 16, 2002 and January 25, 2005)</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">ARTICLE XIV</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">SEAL</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-align:justify;
text-indent:.5in;line-height:150%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Section 1.  The corporate seal of
this corporation shall bear upon its face, in a circle, the words &#147;PHILIPPINE
LONG DISTANCE TELEPHONE COMPANY&#148;, and within the circle a desk telephone
instrument and the words and figures, &#147;INCORPORATED 1928&#148;.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on March 29, 2001)</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">ARTICLE XV</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">AMENDMENTS</p>

<p style='text-align:justify;line-height:150%;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">*          Section 1.  The owners of the majority of the subscribed
capital stock may, at a regular or special meeting duly called for the purpose,
amend or repeal these By-Laws, or adopt new By-laws.  The owners of two-thirds
of the subscribed capital stock may delegate to the Board of Directors the
power to amend or repeal these By-Laws or to adopt new By-Laws; provided,
however, that any such power so delegated to the Board of Directors shall be
considered as revoked whenever a majority of the stockholders shall so vote at
a regular or special meeting called for the purpose.</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(* Amended on April 15, 1953)</p>

<p align=center style='text-align:center;text-indent:.5in;
line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">*          Section
2.  All By-Laws and amendments thereto adopted shall be certified by a majority
of the Directors and by the Secretary or Assistant Secretary, and entered in
the book of By-Laws.  Whenever any amendment or new By-Law is adopted, it shall
be entered in the book of By-Laws with the original By-Laws.  If any By-Law is
repealed, the fact of repeal with the date of the meeting at which the repeal
was enacted, or written assent was filed, shall be stated in said book.</p>

<p align=center style='text-align:center;line-height:150%' style="margin-top:0;margin-bottom:0">(*Amended
on March 29, 2001)</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">The
following notation is <u>FOR GUIDANCE ONLY</u> and does not constitute a part
of the By-Laws of Philippine Long Distance Telephone Company.</p>

<p style='text-align:justify;text-indent:.5in;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">            NOTE:
Under the provisions of Section 1 of ARTICLE XV (formerly Article XIV) of the
By-Laws of Philippine Long Distance Telephone Company, the owners of two-thirds
of the subscribed capital stock may delegate to the Board of Directors the
power to amend, repeal or adopt new By-Laws.  Under the authority given by said
section of the By-Laws, the stockholders under date of April 15, 1953 <u>delegated to the Board</u> the power to amend, repeal or adopt new By-Laws.</p>

<p style='text-align:justify;line-height:150%' style="margin-top:0;margin-bottom:0">&nbsp;</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Computation
of Operating Income and Earnings Per Share</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">For the years 2001
through 2005</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'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-top:
 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"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 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"><b>2005</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 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"><b>2005</b><b>(1)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 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"><b>2004</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;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"><b>2003</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.0pt;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"><b>2002</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.0pt;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"><b>2001</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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"><b>&nbsp;</b></p>
 </td>
 <td   colspan=8 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"><b> (in millions,
 except net operating income (loss) per common share)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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"><b>1. Operating income (loss) per share</b></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"><b>&nbsp;</b></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"><b>&nbsp;</b></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"><b>&nbsp;</b></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"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 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"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 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"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 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=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 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=' border:none;border-bottom:
 solid windowtext 1.0pt;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=' border:none;border-bottom:
 solid windowtext 1.0pt;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   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;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   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;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 style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.3in;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Operating income (loss) </p>
 </td>
 <td   valign=top style=' border:none;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">Php48,514</p>
 </td>
 <td   valign=top style=' border:none;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$914</p>
 </td>
 <td   valign=bottom style=' border:none;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">Php48,539</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php33,379</p>
 </td>
 <td   valign=bottom style=' border:none;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">Php12,029</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 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">(Php7,994)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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">Deduct:  Dividends on preferred stock</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">1,677</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">32</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">1,764</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,739</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">1,645</p>
 </td>
 <td   colspan=3 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">1,503</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:49.5pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accretion of redemption value of
 preferred stock subject to mandatory conversion</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=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,443</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=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27</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=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,503</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:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,309</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,004</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;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">542</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.3in;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Operating income (loss) applicable to
 common shareholders</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">Php45,394</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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$855</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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">Php45,272</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php30,331</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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">Php9,380</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;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">(Php10,039)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   valign=top style=' border:none;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=' border:none;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;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;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <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   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <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   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.3in;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Operating income (loss) </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">Php48,514</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$914</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">Php48,539</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php33,379</p>
 </td>
 <td   colspan=2 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">Php12,029</p>
 </td>
 <td   colspan=2 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">(Php7,994)</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:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Deduct:  Dividends on preferred stock</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">70</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</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">49</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' 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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,036</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,503</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:45.0pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accretion of redemption value of
 preferred stock subject to mandatory conversion</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,746</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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">33</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;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:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' 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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,004</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'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">542</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:.3in;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Operating income (loss) applicable to
 common shareholders</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php46,698</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$880</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php48,490</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:3.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php32,021</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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php9,989</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'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php10,039)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:12.6pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=top style=' border:none;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=top style=' border:none;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=' border:none;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=' border:none;background:
 #D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' 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'>
 <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=' border:none;
 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 style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:31.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Weighted average number of common shares
 (in thousands)</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=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:3.15pt;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'>
 <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'>
 <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 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:9.9pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outstanding common shares, beginning</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">170,214</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>
 <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">169,476</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' 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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,895</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,498</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-left:.3in;text-indent:5.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Effect of issuance of common shares
 during the year</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">1,855</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">&nbsp;</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">252</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:3.15pt;text-align:right;
 page-break-after:avoid' 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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">200</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'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;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=' border:none;border-bottom:double windowtext 1.5pt;
 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">172,069</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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=' border:none;border-bottom:
 double windowtext 1.5pt;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">169,728</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' 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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">169,095</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'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:12.6pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   valign=top style=' border:none;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=' border:none;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;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;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' 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'>
 <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=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:31.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Weighted average number of common shares
 (in thousands)</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>
 <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>
 <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:3.15pt;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'>
 <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'>
 <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'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:9.9pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outstanding common shares, beginning</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">170,214</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=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">169,476</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' 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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,895</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,498</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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">Effect of issuance of common shares during the year</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">1,855</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>
 <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">252</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td   colspan=2 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">200</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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">Weighted average number of shares under ESOP during
 the year(3)</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">94</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>
 <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">155</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;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 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   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;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:#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">Common share equivalent of preferred shares deemed
 dilutive</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">10,858</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>
 <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">22,381</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24,222</p>
 </td>
 <td   colspan=2 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">22,160</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;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-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 style='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 1.5pt;border-right:none;
 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">183,021</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='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:double windowtext 1.5pt;border-right:none;
 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">192,264</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:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">193,635</p>
 </td>
 <td   colspan=2 valign=bottom 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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">191,255</p>
 </td>
 <td   colspan=2 valign=bottom 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:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.75pt'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:6.75pt'>
 <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 1.5pt;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'>
 <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:double windowtext 1.5pt;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'>
 <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:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:6.75pt'>
 <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:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:6.75pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 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 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:6.75pt'>
 <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=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:6.75pt'>
 <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;height:6.2pt'>
 <td   valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:6.2pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Operating income (loss) per share </p>
 </td>
 <td   valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:6.2pt'>
 <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;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:6.2pt'>
 <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:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:6.2pt'>
 <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:
 #D9D9D9;padding:0in 5.4pt 0in 5.4pt;height:6.2pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' 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;height:6.2pt'>
 <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=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;height:6.2pt'>
 <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'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</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">Php263.81</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$4.97</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">Php266.73</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php179.04</p>
 </td>
 <td   colspan=2 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">Php55.47</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php59.52)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">255.15</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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">4.81</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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">252.20</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:3.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">165.37</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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">52.23</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'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(59.52)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:5.75pt;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;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:5.75pt;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;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:5.75pt;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;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:5.75pt;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;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:5.75pt;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;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:5.75pt;text-align:center;
 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=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>
 </td>
 <td   colspan=8 valign=top style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:5.75pt;text-align:center;
 page-break-after:avoid' 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'>
 <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>2. Earnings per share(2)</b></p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;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:#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"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;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=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</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: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 5.4pt 0in 5.4pt'>
 <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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <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=' 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">&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'>
 <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=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:31.5pt;text-indent:-.2in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net income (loss) after cumulative
 effect of change in accounting policy</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">Php40,603</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">US$765</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">Php28,101</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">Php11,045</p>
 </td>
 <td   colspan=2 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">(Php6,158)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php27,782)</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:17.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Deduct:  Dividends on preferred stock </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">1,677</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">32</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">1,764</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">1,739</p>
 </td>
 <td   colspan=2 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">1,645</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,503</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:40.5pt;text-indent:-22.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">               Accretion to redemption
 value of preferred stock<br>
 subject to mandatory conversion</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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">1,443</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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">27</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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">1,503</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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">1,309</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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,004</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'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">542</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:17.1pt;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:#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">Php37,483</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$706</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php24,834</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='text-align:right;page-break-after:avoid' 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'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php8,807)</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'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php29,827)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:12.6pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   valign=bottom style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <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=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <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=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <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=' border:none;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   colspan=2 valign=bottom style=' border:none;
 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   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:31.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net income (loss) after cumulative
 effect of change in accounting policy</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">Php40,603</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">US$765</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">Php28,101</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">Php11,045</p>
 </td>
 <td   colspan=2 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">(Php6,158)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php27,782)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Deduct:  Dividends on preferred stock </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">70</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">1</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">285</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">1,485</p>
 </td>
 <td   colspan=2 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">1,645</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,503</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-left:40.5pt;text-indent:-22.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">               Accretion to redemption
 value of preferred stock<br>
 subject to mandatory 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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,746</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">33</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,503</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:.7pt;text-align:right;
 page-break-after:avoid' 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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,004</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'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">542</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:12.6pt;text-indent:5.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net income (loss) applicable to common
 shareholders</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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">Php38,787</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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$731</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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">Php26,313</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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">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'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php8,807)</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'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php29,827)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:12.6pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=bottom style=' border:none;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;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;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;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   colspan=2 valign=bottom style=' border:none;
 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   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <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 style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:31.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Weighted average number of common shares
 (in thousands)</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   colspan=2 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   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:9.9pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outstanding common shares, beginning</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">170,214</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">169,476</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">169,361</p>
 </td>
 <td   colspan=2 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">168,895</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,498</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.3in;text-indent:5.4pt;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=' border:none;border-bottom:
 solid windowtext 1.0pt;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">1,855</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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=' border:none;border-bottom:
 solid windowtext 1.0pt;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">252</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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">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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">200</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'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">162</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='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 1.5pt;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">172,069</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='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 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">169,728</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='text-align:right;page-break-after:avoid' 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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">169,095</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'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;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">Diluted</p>
 </td>
 <td   valign=bottom style=' border:none;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=' border:none;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=' border:none;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=' border:none;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   colspan=2 valign=bottom style=' border:none;
 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   colspan=2 valign=bottom style=' border:none;
 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 style='page-break-inside:avoid'>
 <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">Weighted average number of common shares (in
 thousands)</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   colspan=2 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   colspan=2 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 style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Outstanding common shares, beginning</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">170,214</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">169,476</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">169,361</p>
 </td>
 <td   colspan=2 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">168,895</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,498</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:27.0pt;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 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,855</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">252</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">52</p>
 </td>
 <td   colspan=2 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">200</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Weighted average number of shares under ESOP during
 the year(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">94</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">155</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   colspan=2 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   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;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 5.4pt 0in 5.4pt'>
 <p style='text-indent:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Common share equivalent of preferred shares deemed
 dilutive:</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,858</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;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 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,213</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,069</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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</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'>
 <p align=right style='margin-right:.05in;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:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:.25in;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:#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">183,021</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 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=' border:none;border-bottom:
 double windowtext 1.5pt;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">181,096</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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">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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">169,095</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'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Earnings per share(2) </p>
 </td>
 <td   valign=top style=' border:none;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=' border:none;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;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;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   colspan=2 valign=bottom style=' border:none;
 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   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <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:11.7pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p style='margin-left:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php217.84</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php4.11</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php146.32</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' 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;height:11.7pt'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php52.08)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php176.85)</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:8.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Diluted</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">211.93</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3.99</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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">145.30</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:2.9pt;text-align:right;
 page-break-after:avoid' 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'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</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'>
 <p align=right style='text-align:right;page-break-after:avoid' 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>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

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

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:13.5pt;margin-bottom:.0001pt;text-indent:-13.5pt;line-height:normal;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>(1)    The PLDT Group maintains its accounts in Philippine
peso.  For convenience, the peso financial information as at and for the year
ended December 31, 2005 has been translated into U.S. dollars at the exchange
rate of Php53.062 to US$1.00, the peso-dollar rate as quoted through the
Philippine Dealing System as at December 31, 2005.</i></p>

<p style='page-break-after:avoid' 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"><i>(2)    Our convertible preferred stocks were deemed
anti-dilutive for the years ended December 31, 2002 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>

<p 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"><i>(3)    The dilutive effect of the outstanding options
is reflected as additional share dilution in the computation of earnings per
common share, see Note 20 &#150; Earnings per Common Share.</i></p>

<p style='text-indent:5.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>EXHIBIT 7</b></p>

<p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:13.5pt;text-indent:-13.5pt;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>PHILIPPINE LONG DISTANCE TELEPHONE COMPANY</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Calculation of Ratio of Earnings to Fixed Charges</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">For the years 2001 through
2005</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:91.36%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <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 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=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b><u>2005</u></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;
 background:white;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b><u>2005</u></b><b><u>(1)</u></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 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b><u>2004</u></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 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b><u>2003</u></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 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b><u>2002</u></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 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:white;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   colspan=6 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:.05in;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'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:white;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=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt'>
 <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:white;padding:0in 5.4pt 0in 5.4pt'>
 <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:white;padding:0in 5.4pt 0in 5.4pt'>
 <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:white;padding:0in 5.4pt 0in 5.4pt'>
 <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:white;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;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:white;padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;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">Earnings
 (a)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php57,668</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">US$1,087</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php49,155</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php24,168</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php11,320</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Fixed charges &#150; (b)</p>
 </td>
 <td   valign=top style=' border:none;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">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <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'>
 <p align=right style='margin-right:.05in;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'>
 <p align=right style='margin-right:.05in;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:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Fixed
 charges excluding amortization of capitalized interest</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php10,759</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">US$203</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php12,805</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php12,747</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php14,177</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php15,839</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Capitalized
 interest, net of amortization</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(635)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(12)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(915)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(714)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(394)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:9.0pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">1,170</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;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:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php10,124</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">US$191</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php11,890</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php12,033</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php13,783</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php17,009</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 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Ratio (a/b) (2)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;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">5.7</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;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">5.7</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">4.1</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:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2.0</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:.05in;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'>
 <p align=right style='margin-right:.05in;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">_____________</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 peso.  For convenience, the peso financial information as at and
for the year ended December 31, 2005 has been translated into U.S. dollars at
the exchange rate of Php53.062 to US$1.00, the peso-dollar rate as quoted
through the Philippine Dealing System as at December 31, 2005.</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 Php2,463 million and Php30,126 million for
the two years ended December 31, 2002 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 at December 31, 2005)</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 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">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">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">Mabuhay Satellite Corporation (formerly
 Mabuhay Phiilippines 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:#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>

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

<p align=right style='text-align:right' 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-top:0in;margin-right:0in;margin-bottom:12.0pt;
margin-left:0in;line-height:normal' 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 at, 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 No. 33-8238 (June 5, 2003), Release No. 33-8392 (February 24, 2004) and Release No. 33-8545 (March 2, 2005)];</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 at 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;&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;&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">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">Date:  June 29, 2006</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>

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

<p style='margin-left:22.3pt;text-indent:355.7pt' 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;&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;&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;&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 at, 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;&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 No. 33-8238 (June 5, 2003), Release No.33-8392 (February 24, 2004) and Release No. 33-8545 (March 2, 2005)];</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 at 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;&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">&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Date:
June 29, 2006</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>&nbsp;</b></p>

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

<p style='text-indent:5.25in' style="margin-top:0;margin-bottom:0"><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, 2005 (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 29, 2006</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 style='margin-left:22.5pt;text-indent:346.5pt' 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, 2005 (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 29, 2006</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"><b>Report of Independent
Registered Public Accounting Firm</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">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">&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, 2005 and 2004, 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, 2005.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.</p>

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

<p 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.  We were not engaged to
perform an audit of the Company&#146;s internal control over financial reporting.
Our audit included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Company's internal control over financial reporting. Accordingly, we
express no such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.</p>

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

<p 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, 2005 and 2004, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2005, in conformity with United States generally accepted
accounting principles.</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">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">/s/ 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">June 13, 2006</p>

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

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

<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;
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>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, 2005 AND 2004</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in million pesos, except par value and share 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=right style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:right;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:100.26%;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' 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' style="margin-top:0;margin-bottom:0"><b>2005</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' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=center style='margin-top:6.0pt;;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' 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' 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' 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' 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' style="margin-top:0;margin-bottom:0">Cash and cash equivalents (Notes 4 and 23)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>30,064</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' style="margin-top:0;margin-bottom:0">27,321</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' style="margin-top:0;margin-bottom:0">Short-term investments (Note 23)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,746</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' style="margin-top:0;margin-bottom:0">3,873</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' style="margin-top:0;margin-bottom:0">Trade and other receivables - net (Notes 5 and 23) </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>7,113</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' style="margin-top:0;margin-bottom:0">7,524</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' style="margin-top:0;margin-bottom:0">Inventories and supplies - net (Note 6)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,548</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' style="margin-top:0;margin-bottom:0">2,140</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' style="margin-top:0;margin-bottom:0">Deferred income tax assets - net (Note 19)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>9,866</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' style="margin-top:0;margin-bottom:0">10,331</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' style="margin-top:0;margin-bottom:0">Derivative assets (Note 23)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>37</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' style="margin-top:0;margin-bottom:0">335</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' 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' style="margin-top:0;margin-bottom:0"><b>5,259</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' style="margin-top:0;margin-bottom:0">3,422</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' style="margin-top:0;margin-bottom:0">Other current 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' style="margin-top:0;margin-bottom:0"><b>1,628</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' style="margin-top:0;margin-bottom:0">1,972</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' 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' style="margin-top:0;margin-bottom:0"><b>58,261</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' style="margin-top:0;margin-bottom:0">56,918</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' 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' 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' 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:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.25pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Property, plant and equipment - 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' style="margin-top:0;margin-bottom:0"><b>173,007</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' style="margin-top:0;margin-bottom:0">186,095</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' style="margin-top:0;margin-bottom:0">Investments - 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' style="margin-top:0;margin-bottom:0"><b>361</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' style="margin-top:0;margin-bottom:0">294</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.75pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:6.75pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Investments-available-for-sale (Note 23)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:6.75pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>109</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:6.75pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">104</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' style="margin-top:0;margin-bottom:0">Goodwill and other intangible assets - net (Note 9)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>16,875</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' style="margin-top:0;margin-bottom:0">16,561</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' style="margin-top:0;margin-bottom:0">Deferred income tax assets - net (Note 19)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>13,583</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' style="margin-top:0;margin-bottom:0">9,696</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' style="margin-top:0;margin-bottom:0">Derivative assets (Note 23)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' 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:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">4,116</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' style="margin-top:0;margin-bottom:0">Other noncurrent assets - 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' style="margin-top:0;margin-bottom:0"><b>4,376</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' style="margin-top:0;margin-bottom:0">5,257</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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 style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total Noncurrent Assets</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='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>210,959</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='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">222,123</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="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' style="margin-top:0;margin-bottom:0"><b>269,220</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' style="margin-top:0;margin-bottom:0">279,041</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.1pt'>
 <td   colspan=3 valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.1pt'>
 <p align=center style='margin-top:6.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' 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' 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' 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' 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-top:0;margin-bottom:0">Accounts payable (Note 23)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>15,482</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' style="margin-top:0;margin-bottom:0">8,987</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;text-indent:-18.4pt' style="margin-top:0;margin-bottom:0">Accrued expenses and other current liabilities (Notes
 11, 16 and 23)<br>
 (Due to related parties amounted to Php1,156 in 2005 and Php3,270 in 2004)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>15,986</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' style="margin-top:0;margin-bottom:0">14,763</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">Unearned revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,125</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' style="margin-top:0;margin-bottom:0">3,218</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">Derivative liabilities (Note 23)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>192</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' style="margin-top:0;margin-bottom:0">473</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">Current portion of
 interest-bearing financial liabilities (Notes 7, 12, 21 and 23)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>19,513</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' style="margin-top:0;margin-bottom:0">28,503</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-top:0;margin-bottom:0">Dividends payable
 (Notes 20 and 23)</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' style="margin-top:0;margin-bottom:0"><b>746</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' style="margin-top:0;margin-bottom:0">652</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">Income tax payable (Note 19)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,080</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' style="margin-top:0;margin-bottom:0">1,976</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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 style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total Current 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'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>57,124</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='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">58,572</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.25pt'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.25pt'>
 <p style='margin-top:4.0pt' 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:8.25pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;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;height:8.25pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</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' style="margin-top:0;margin-bottom:0">Interest-bearing financial liabilities &#150; net of
 current portion (Notes 7, 12, 21 and 23)</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' style="margin-top:0;margin-bottom:0"><b>93,897</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' style="margin-top:0;margin-bottom:0">131,978</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 liabilities (Note 23)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,777</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">6,930</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Deferred income tax liabilities (Note 19)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:13.45pt;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;height:8.55pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.45pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Pension and other employee benefits (Note 17)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,943</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">2,669</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Customers&#146; deposits</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,214</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">2,174</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Remaining excess of debt forgiven over value of
 consideration given - net (Notes 12 and 14)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,071</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">5,834</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' style="margin-top:0;margin-bottom:0">Deferred credits and other noncurrent liabilities
 (Notes 13 and 21)</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' style="margin-top:0;margin-bottom:0"><b>8,421</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' style="margin-top:0;margin-bottom:0">6,988</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:#F3F3F3;padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:.25in' 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:#F3F3F3;padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>119,367</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;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">156,573</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:#E0E0E0;padding:0in 0in 0in 0in;height:
 11.85pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' 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:#E0E0E0;padding:0in 0in 0in 0in;height:
 11.85pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,130</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 11.85pt'>
 <p align=right style='margin-right:13.3pt;text-align:right' style="margin-top:0;margin-bottom:0">861</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' style="margin-top:0;margin-bottom:0"><b>Preferred Stock Subject to Mandatory Redemption </b>(Notes 14 and 23)</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:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>12,004</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' style="margin-top:0;margin-bottom:0">14,956</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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' style="margin-top:0;margin-bottom:0"><b>Stockholders&#146; Equity</b> (Notes 15 and 20)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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' 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: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' 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:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Preferred stock, Php10 par value, authorized -
 822,500,000 shares: </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' style="margin-top:0;margin-bottom:0"><b>&nbsp;</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' 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:18.4pt' style="margin-top:0;margin-bottom:0">Series
 A to EE (issued and outstanding - 407,343,035 shares in 2005 and <br>
 409,065,857 shares in 2004)</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' style="margin-top:0;margin-bottom:0"><b>4,073</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' style="margin-top:0;margin-bottom:0">4,091</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' style="margin-top:0;margin-bottom:0">Series
 III (issued and outstanding - 4,616,200 shares in  2004)</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' style="margin-top:0;margin-bottom:0"><b>&#150;</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' 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:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:18.4pt' style="margin-top:0;margin-bottom:0">Series
 IV (issued and outstanding - 36,000,000 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' style="margin-top:0;margin-bottom:0"><b>360</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' 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:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:18.4pt;text-indent:-18.4pt' style="margin-top:0;margin-bottom:0">Common stock, Php5 par value, authorized -
 234,000,000 shares; issued and outstanding - 180,789,003 <br>
 shares in 2005 and 170,213,722 shares in 2004</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' style="margin-top:0;margin-bottom:0"><b>904</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' style="margin-top:0;margin-bottom:0">851</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' style="margin-top:0;margin-bottom:0">Capital in excess of par value</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' style="margin-top:0;margin-bottom:0"><b>78,873</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' style="margin-top:0;margin-bottom:0">75,396</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' style="margin-top:0;margin-bottom:0">Accumulated deficit (Note 20)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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' style="margin-top:0;margin-bottom:0"><b>(5,288)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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' style="margin-top:0;margin-bottom:0">(33,197)</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' 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:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p align=right style='margin-right:13.7pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>673</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' style="margin-top:0;margin-bottom:0">532</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:.25in' 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:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p align=right style='margin-right:13.7pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>79,595</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:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">48,079</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:#E0E0E0;padding:0in 0in 0in 0in;
 height:6.0pt'>
 <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;
 height:6.0pt'>
 <p align=right style='margin-right:13.7pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>269,220</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:6.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right' style="margin-top:0;margin-bottom:0">279,041</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-top:3.0pt' style="margin-top:0;margin-bottom:0">See
accompanying Notes to Consolidated Financial Statements.</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 style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">CONSOLIDATED
STATEMENTS OF INCOME</h1>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in million pesos, except per share amounts)</b></p>

<p align=right style='text-align:right' 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:100.36%;margin-left:.4pt;border-collapse:collapse;width:100.36% !msorm;
 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>2005</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">2004</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">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.1pt' style='page-break-inside:
 avoid !msorm;height:7.1pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.1pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>OPERATING REVENUES </b>(Notes 17,
 18 and 24)</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:7.1pt'>
 <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:7.1pt'>
 <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:7.1pt'>
 <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">Service revenues</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>120,348</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">114,904</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">100,486</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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Non-service revenues</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>2,987</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">6,269</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">10,714</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='margin-bottom: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-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>123,335</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">121,173</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">111,200</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"><b>OPERATING EXPENSES </b>(Note 18)</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>&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:4.65pt;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:4.65pt;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:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation
 and amortization (Notes 7 and 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>27,855</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">20,098</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">21,812</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 employee benefits (Notes 17 and 18)</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>13,852</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">12,016</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">13,185</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.35pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Repairs and maintenance (Note 16)<br>
 (Total transactions with related parties amounted to Php640, Php111 and <br>
 Php68 in 2005, 2004 and 2003, respectively)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;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>6,705</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;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">5,671</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;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">4,931</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost
 of computers, cellular handsets and SIM-packs sold</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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"><b>5,880</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">10,599</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">15,790</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">Selling and promotions (Note 16)<br>
 (Total transactions with related parties amounted to Php29, Php32 and <br>
 Php26 in 2005, 2004 and 2003, respectively)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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"><b>5,068</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">5,708</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">4,394</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">Taxes and licenses (Note 22)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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"><b>2,516</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">2,055</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">2,147</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">Professional and other contracted
 services (Note 16)<br>
 (Total transactions with related parties amounted to Php147, Php694 and <br>
 Php616 in 2005, 2004 and 2003, respectively)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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"><b>2,432</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">2,187</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">1,176</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-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision
 for doubtful accounts (Notes 5 and 24)</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>2,251</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">3,955</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">4,092</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">Rent (Note 16)<br>
 (Total transactions with related parties amounted to Php8, Php6 and <br>
 Php7 in 2005, 2004 and 2003, respectively)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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"><b>2,086</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">2,160</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">2,166</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:4.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:4.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Insurance and security services (Note
 16)<br>
 (Total transactions with related parties amounted to Php467, Php534 and <br>
 Php581 in 2005, 2004 and 2003, respectively)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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>1,523</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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">1,644</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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">1,528</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Communication,
 training and travel</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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"><b>1,465</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">1,310</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">1,565</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">Cost of satellite air time (All are
 transactions with related parties) (Notes 16 and 21) </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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"><b>1,008</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">1,299</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">1,919</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision
 for inventory obsolescence (Notes 6 and 24)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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"><b>479</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">577</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">251</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortization of intangible assets (Note 9)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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>204</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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">93</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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>
 </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">Asset impairment (Notes 7, 8, 18 and 24)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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"><b>11</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">1,412</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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">675</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">Other operating expenses </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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,486</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,850</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,424</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">&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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>74,821</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">72,634</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">77,821</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-bottom:0in;margin-bottom:.0001pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">OPERATING
 INCOME</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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"><b>48,514</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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">48,539</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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">33,379</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"><b>FINANCING COSTS </b> (Notes 18
 and 24)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(3,423)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(16,233)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(23,152)</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>INTEREST INCOME</b> (Note 24)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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"><b>1,457</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">942</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">513</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"><b>EQUITY SHARE IN NET INCOME (LOSSES) OF ASSOCIATES</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 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"><b>7</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(74)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(88)</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>LOSS</b><b> ON</b><b> DERIVATIVE TRANSACTIONS &#150; </b>net (Note 23)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,801)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(864)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,631)</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"><b>OTHER INCOME </b>- net (Note 18)</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,016</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,530</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">799</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.25pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:3.25pt'>
 <p style='margin-top:0in;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">INCOME
 BEFORE INCOME TAX, CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING POLICY AND
 MINORITY INTEREST IN NET LOSS (INCOME) OF CONSOLIDATED SUBSIDIARIES </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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>45,770</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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">34,840</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;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">9,820</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"><b>BENEFIT FROM (PROVISION FOR) INCOME TAX </b>(Notes 19 and 24)</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:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(4,849)</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:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,826)</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,400</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:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>INCOME BEFORE CUMULATIVE EFFECT OF
 CHANGE IN ACCOUNTING POLICY <br>
 AND MINORITY INTEREST IN NET </b><b>LOSS</b> <b>(INCOME) OF CONSOLIDATED SUBSIDIARIES</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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"><b>40,921</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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">28,014</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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">11,220</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:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>CUMULATIVE EFFECT ON PRIOR YEARS (UP
 TO DECEMBER 31, 2002) OF ADOPTING <br>
 SFAS 143, &#147;ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS&#148;</b> - net of tax effect <br>
 (Note 3)</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:4.65pt;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: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'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(61)</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:7.1pt;text-indent:-7.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>INCOME BEFORE MINORITY INTEREST IN
 NET LOSS (INCOME) OF CONSOLIDATED SUBSIDIARIES</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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"><b>40,921</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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">28,014</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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">11,159</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:7.1pt;text-indent:-7.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>MINORITY INTEREST IN NET LOSS
 (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'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(318)</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">87</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:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(114)</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"><b>NET INCOME</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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"><b>40,603</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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">28,101</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 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">11,045</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"><b>DIVIDENDS AND ACCRETION OF PREFERRED STOCK </b>(Note 20)</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:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(3,120)</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:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,267)</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:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,048)</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='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS </b>(Note 20)</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>37,483</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24,834</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,997</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"><b>Earnings Per Common Share </b>(Note
 20)</p>
 </td>
 <td   valign=bottom style=' border:none;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"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <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'>
 <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'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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 policy</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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"><b>217.84</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">146.32</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">47.56</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;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cumulative effect of change in
 accounting policy</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:4.65pt;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: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'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(0.36)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 217.84</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 146.32</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">  47.20</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: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 policy</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 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"><b>211.93</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 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">145.30</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 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">46.06</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;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cumulative effect of change in
 accounting policy</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:4.65pt;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: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'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(0.34)</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:18.4pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Diluted 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'>
 <p align=right style='margin-right:4.65pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 211.93</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:4.65pt;text-align:right' style="margin-top:0;margin-bottom:0"> 145.30</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:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">  45.72</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>

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

<p align=center style='margin-top:3.0pt;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 DECEMBER 31, 2005, 2004 AND 2003</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>(in million pesos)</b></p>

<p align=right style='text-align:right' 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;width:101.22% !msorm;border-collapse:
 collapse !msorm'>
 <tr style='page-break-inside:avoid;height:12.75pt' style='page-break-inside:
 avoid !msorm;height:12.75pt !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: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;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: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;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: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;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: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;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: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;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: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;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: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:11.2pt' style='page-break-inside:
 avoid !msorm;height:11.2pt !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:11.2pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Balances as at January 1, 2003</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:11.2pt'>
 <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:
 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:11.2pt'>
 <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:
 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:11.2pt'>
 <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:
 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:11.2pt'>
 <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:
 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:11.2pt'>
 <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:
 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:11.2pt'>
 <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:7.35pt' style='page-break-inside:
 avoid !msorm;height:7.35pt !msorm'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.35pt'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.35pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.35pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.35pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.35pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.35pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.35pt'>
 <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:9.45pt' style='page-break-inside:
 avoid !msorm;height:9.45pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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:10.35pt' style='page-break-inside:
 avoid !msorm;height:10.35pt !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:10.35pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <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:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p align=right style='margin-right:2.6pt;text-align:right' style="margin-top:0;margin-bottom:0"> 120</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.9pt' style='page-break-inside:
 avoid !msorm;height:6.9pt !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:6.9pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Net comprehensive income</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:6.9pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:6.9pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:6.9pt'>
 <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=' 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:6.9pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">11,045</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;height:6.9pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:6.9pt'>
 <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:9.6pt' style='page-break-inside:
 avoid !msorm;height:9.6pt !msorm'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.6pt'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt' style="margin-top:0;margin-bottom:0">Cash dividends (Note 20)</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:9.6pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.6pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.6pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.6pt'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.6pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.6pt'>
 <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:13.95pt' style='page-break-inside:
 avoid !msorm;height:13.95pt !msorm'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.95pt'>
 <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 (Note 20)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.95pt'>
 <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 0in 0in 0in 0in !msorm;height:13.95pt'>
 <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 0in 0in 0in 0in !msorm;height:13.95pt'>
 <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 0in 0in 0in 0in !msorm;height:13.95pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,309)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.95pt'>
 <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 0in 0in 0in 0in !msorm;height:13.95pt'>
 <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:11.25pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 11.25pt'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt' style="margin-top:0;margin-bottom:0">Issuance of capital stock &#150; net (Note 15)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 11.25pt'>
 <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:#F3F3F3;padding:0in 0in 0in 0in;height:
 11.25pt'>
 <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:
 11.25pt'>
 <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:#F3F3F3;padding:0in 0in 0in 0in;height:
 11.25pt'>
 <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:
 11.25pt'>
 <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:
 11.25pt'>
 <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:7.1pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Balances as at December 31, 2003</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,505</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <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 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">74,520</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(58,031)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">2,904</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">24,745</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.55pt'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.55pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Comprehensive income (loss):</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.55pt'>
 <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;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.55pt'>
 <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;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:11.55pt'>
 <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;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:11.55pt'>
 <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:11.55pt'>
 <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;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.55pt'>
 <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:10.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <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:10.35pt'>
 <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:10.35pt'>
 <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:10.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">28,101</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <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:10.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">28,101</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' style="margin-top:0;margin-bottom:0">Translation losses</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <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:8.55pt'>
 <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:8.55pt'>
 <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:8.55pt'>
 <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:8.55pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">(2,168)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2,168)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' style="margin-top:0;margin-bottom:0">Net loss on available-for-sale financial assets</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <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:8.55pt'>
 <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:8.55pt'>
 <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:8.55pt'>
 <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:8.55pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">(5)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(5)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.1pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.1pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' 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;height:
 8.1pt'>
 <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;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.1pt'>
 <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;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.1pt'>
 <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;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.1pt'>
 <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;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.1pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">(199)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(199)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.95pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.95pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Net comprehensive income (loss)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.95pt'>
 <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:
 10.95pt'>
 <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:
 10.95pt'>
 <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:
 10.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">28,101</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.95pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">(2,372)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">25,729</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.7pt'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.7pt'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt' style="margin-top:0;margin-bottom:0">Cash dividends (Note 20)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.7pt'>
 <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:8.7pt'>
 <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:8.7pt'>
 <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:8.7pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,764)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.7pt'>
 <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:8.7pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,764)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:17.1pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:17.1pt'>
 <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 (Note
 20)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:17.1pt'>
 <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=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:17.1pt'>
 <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=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:17.1pt'>
 <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=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:17.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,503)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:17.1pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:17.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,503)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:.1in' style='page-break-inside:avoid !msorm;
 height:.1in !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:.1in'>
 <p style="margin-top:0;margin-bottom:0">Issuance of capital stock &#150;
 net (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;
 height:.1in'>
 <p align=right style='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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:.1in'>
 <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=' 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:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">876</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:.1in'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:.1in'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 872</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.8pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.8pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Balances as at December 31, 2004</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,497</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 851</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">75,396</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.8pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(33,197)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.8pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0"> 532</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:9.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">48,079</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;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <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;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <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;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <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;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <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;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <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:8.55pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <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:8.55pt'>
 <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:8.55pt'>
 <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:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">40,603</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <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:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">40,603</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.45pt' style='page-break-inside:
 avoid !msorm;height:9.45pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' style="margin-top:0;margin-bottom:0">Translation losses</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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 0in 0in 0in 0in !msorm;height:9.45pt'>
 <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 0in 0in 0in 0in !msorm;height:9.45pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">(63)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(63)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:.1in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p style='margin-left:.25in;text-indent:-3.4pt' style="margin-top:0;margin-bottom:0">Net income on available-for-sale financial assets</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <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:.1in'>
 <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:.1in'>
 <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:.1in'>
 <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:.1in'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">   5</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.45pt' style='page-break-inside:
 avoid !msorm;height:9.45pt !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:9.45pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' 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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.45pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.45pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.45pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.45pt'>
 <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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.45pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">199</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:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 199</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.8pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 7.8pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Net comprehensive income</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 7.8pt'>
 <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:
 7.8pt'>
 <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:
 7.8pt'>
 <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:
 7.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">40,603</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 7.8pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0"> 141</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 7.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">40,744</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.95pt'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.95pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Cash dividends
 (Note 20)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.95pt'>
 <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:10.95pt'>
 <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:10.95pt'>
 <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:10.95pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(11,251)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.95pt'>
 <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:10.95pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(11,251)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.95pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.95pt'>
 <p style='margin-left:13.9pt;text-indent:-13.9pt' style="margin-top:0;margin-bottom:0">Accretion to redemption value of preferred stock
 subject to mandatory redemption (Note
 20)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.95pt'>
 <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:13.95pt'>
 <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:13.95pt'>
 <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:13.95pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,443)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.95pt'>
 <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:13.95pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,443)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Issuance of capital stock &#150; net (Note 15)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(64)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,477</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <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:
 8.55pt'>
 <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:
 8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,466</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.1pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b>Balances as at December 31, 2005</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>4,433</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 904</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>78,873</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(5,288)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0"><b> 673</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>79,595</b></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>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">CONSOLIDATED
STATEMENTS OF CASH FLOWS</h1>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in million 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=right style='text-align:right;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:100.38%;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='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'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   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"><b>CASH FLOWS FROM OPERATING ACTIVITIES</b></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>&nbsp;</b></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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net income </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>40,603</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">28,101</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,045</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   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">Adjustments to reconcile net income to
 net cash provided by operating activities:</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>
 <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   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Depreciation and amortization (Notes 7
 and 24)</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>27,855</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">20,098</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21,812</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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 (Notes 5
 and 24)</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>2,251</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,955</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,092</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accretion on financial liabilities (Note
 18)</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>568</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,185</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">729</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Loss on derivative instruments (Note 18)</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>490</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">617</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,616</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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
 (Notes 6 and 24)</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>479</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">577</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;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   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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 (loss)
 of consolidated subsidiaries</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>318</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">114</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;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Amortization of intangible assets (Note
 9)</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>204</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">93</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <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>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Loss (gain) on disposal of property and equipment</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>160</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">155</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(463)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Asset impairment (Notes 7, 8 and 18)</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>11</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,412</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">675</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Equity share in net losses (income) of
 associates</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(7)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">74</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">88</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Benefit from deferred income tax (Note
 19)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(3,734)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(531)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,731)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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
 (gains)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(8,196)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,882</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,527</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;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Gain on debt exchange and debt
 restructuring transactions (Note 18)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;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:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,816)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <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'>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(360)</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:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">478</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:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,345)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <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:
 #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>60,642</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">56,193</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">47,176</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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:#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>
 <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   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">Decrease (increase) in:</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>
 <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   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Trade and other receivables</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(2,315)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,305</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,364)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#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>509</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;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:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,576</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,867)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,279)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">306</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   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">Increase (decrease) in:</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>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <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'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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:#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>6,756</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,848</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,231)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#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>1,116</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,844</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,215</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Unearned revenues</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>110</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(343)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">787</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#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>103</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,367</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(280)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(85)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,066)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,603)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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'>
 <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:#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>64,969</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'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">62,860</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'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">42,582</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   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"><b>CASH FLOWS FROM INVESTING ACTIVITIES</b></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>&nbsp;</b></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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   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">Additions to property, plant and equipment</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>(15,864)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(19,268)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(17,943)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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:#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>912</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">112</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">226</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Payments for purchase of investments &#150; net of cash acquired</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>(248)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,276)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(197)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash receipts (disbursements) for lease deposits and other noncurrent
 assets</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>974</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,834)</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">(404)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Decrease (increase) in short-term investments</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>1,206</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,212)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,661)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Increase in investments in debt securities</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>(60)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(286)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.4pt;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   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash of disposed subsidiary</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>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <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'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(93)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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:#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: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'>
 <p align=right style='margin-right:4.3pt;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   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'>
 <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'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(13,080)</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'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(24,764)</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'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(20,021)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   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"><b>CASH FLOWS FROM FINANCING ACTIVITIES</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"><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>
 <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   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(47,849)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(41,697)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(31,548)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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:#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>10,797</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,187</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,507</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <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'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(387)</b></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">(2,412)</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">(1,698)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(11,173)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,692)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,603)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Proceeds from notes payable</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>329</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">457</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">3,135</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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:#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>334</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">281</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">94</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">Increase (decrease) in capital lease liabilities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(38)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(134)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;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   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Debt issuance costs paid</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(172)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(68)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.7pt;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   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'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net cash 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'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(48,159)</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'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(30,078)</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'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(14,135)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-8.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>EFFECT OF FOREIGN EXCHANGE RATE
 CHANGES ON CASH AND <br>
 CASH EQUIVALENTS</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:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(987)</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:1.7pt;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'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(28)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' border:none;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"><b>NET INCREASE IN CASH AND CASH
 EQUIVALENTS</b></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>2,743</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,949</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,398</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   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"><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'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>27,321</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:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,372</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:4.25pt;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   style=' border:none;border-bottom:double windowtext 2.25pt;
 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"><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'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>30,064</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:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27,321</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:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,372</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-top:3.0pt;text-align:justify' style="margin-top:0;margin-bottom:0"><i>See accompanying Notes to Consolidated Financial
Statements.</i></p>

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

<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;&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.  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 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, which at that time
was the second largest telephone company in the Philippines.  In 1998, First
Pacific Company Limited, or First Pacific, through its Philippine and other
affiliates, acquired a significant interest in PLDT.  On March 24, 2000, NTT
Communications Corporation, or NTT Communications, through NTT Communications
Capital (UK) Ltd., became PLDT&#146;s strategic partner with approximately 15%
economic and voting interest in the issued common stock of PLDT.  Simultaneous
with NTT Communications&#146; investment in PLDT, we acquired 100% of Smart
Communications, Inc., or Smart.  On March 14, 2006, NTT DoCoMo, Inc., or
DoCoMo, acquired from NTT Communications approximately 7% of PLDT&#146;s outstanding
common shares, with NTT Communications retaining ownership of approximately 7%
of PLDT&#146;s common shares.</p>

<p style='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.  On October 19, 1994, an American Depositary Receipts, or ADRs,
facility was established, pursuant to which Citibank N.A., as the depositary,
issued ADRs evidencing American Depositary Shares, or ADSs, with each ADS
representing one PLDT common share with a par value of Php5.  Effective
February 10, 2003, PLDT appointed JP Morgan Chase Bank as successor depositary
for PLDT&#146;s ADR facility.  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 holders of the ADRs.  The ADSs have been
listed and traded on the New York Stock Exchange, or NYSE, in the United States under the symbol &#147;PHI&#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">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='margin-bottom:0in;margin-bottom:.0001pt' 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">PLDT
has three employee unions. The three unions are in aggregate composed of 7,160
members as at December 31, 2005.  The union members represent 38% of the total
regular employees of PLDT and Subsidiaries, or PLDT Group, on a consolidated
basis as at December 31, 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">Our
registered office address is Ramon Cojuangco Building, Makati Avenue, Makati City , 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">&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;&nbsp;
</b><b>Basis of
Consolidated Financial Statements 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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our consolidated financial statements include the
financial statements of PLDT and those of the following subsidiaries, which
were all incorporated in the Philippines except for PLDT Global Corporation, or
PLDT Global, (incorporated in the British Virgin Islands) and Digital Paradise
Thailand Ltd., or Digital Paradise Thailand, a 51% owned subsidiary of ePLDT,
Inc., or ePLDT, (incorporated in Thailand).</p>

<p align=right style='text-align:right' 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:100.96%;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='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Name of Subsidiary</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p style='margin-left:1.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Principal Activity</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=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>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-top:6.0pt;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 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 0in;margin-left:.15in;margin-bottom:.0001pt;text-indent:-9.35pt;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-top:6.0pt;margin-right:9.0pt;
 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>
 <td   valign=top style=' 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">Smart Communications, Inc., or Smart <br>
 and subsidiaries</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cellular mobile and
 telecommunications services </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' 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">ACeS Philippines Cellular
 Satellite<br>
 Corporation, or ACeS Philippines</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Satellite phone services </p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:49.5pt;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Telesat, Inc., or Telesat</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Satellite communications
 services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">94.4</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' 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">Mabuhay Satellite Corporation,
 or <br>
 Mabuhay Satellite</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Satellite communications
 services </p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">67.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Fixed Line</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;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:49.5pt;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:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT Clark Telecom, Inc., or <br>
 Clark Telecom</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' 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">Subic Telecommunications Company, Inc., <br>
 or Subic Telecom</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' 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">PLDT Global Corporation, or PLDT Global,
 and subsidiaries</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' 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">Smart-NTT Multimedia, Inc., or SNMI</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Data and network services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' 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">PLDT-Maratel, Inc., or Maratel</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">97.5</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' 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">Bonifacio Communications Corporation, <br>
 or BCC</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Telecommunications, infrastructure and
 related value-added services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">75.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 0in;margin-left:9.4pt;margin-bottom:.0001pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Information and Communications <br>
 Technology </b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 0in;margin-left:.15in;margin-bottom:.0001pt;text-indent:-9.35pt;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-top:6.0pt;margin-right:49.5pt;
 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>
 <td   valign=top 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">ePLDT and subsidiaries</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:.15in;text-indent:-9.35pt;page-break-after:
 avoid' 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=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:49.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
</table></center></div>

<p align=right style='text-align:right' 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
significant 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 align=right style='text-align:right' 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 align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Minority
interests represent the equity interests in Wolfpac Communications, Inc., or
Wolfpac, Smart Broadband, Inc., or Smart Broadband (formerly Meridian Telekoms,
Inc., or Meridian), Telesat, Mabuhay Satellite, Maratel, BCC, Digital Paradise,
Inc., or Digital Paradise, Digital Paradise Thailand, netGames, Inc., or
netGames, Infocom Technologies, Inc., or Infocom, and Airborne Access
Corporation, or Airborne Access, not held by the PLDT Group.</p>

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

<p align=right style='text-align:right' 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;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;&nbsp;
</b><b>Summary of Significant
Accounting Policies and Practices</b></p>

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

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

<p align=right style='text-align:right;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">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 mobile, business, residential
and payphone customers.  Revenue, which excludes value-added tax, or VAT,
represents the value of fixed consideration that has been received or is
receivable.  Revenue is recognized when there is evidence of an arrangement,
the fee is fixed or determinable, 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
transactions.  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>Service
revenues</i></p>

<p align=right style='text-align:right' 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
periods of customer relationship for fixed line and cellular service.  Postpaid
service arrangements include subscription fees, typically fixed monthly fees,
which are recognized over the subscription period on a pro rata basis. </p>

<p align=right style='text-align:right' 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>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 year 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 align=right style='text-align:right' 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 align=right style='text-align:right' 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 insignificant 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 against 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 align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Non-service
revenues</i></p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Handset
and equipment sales.  </i>Sales of
cellular handsets and communication equipment are recognized upon delivery to
the customer.</p>

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

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Interest
income</i></p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Interest
income 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='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Other
income</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">Other
income is recognized when the delivery of the product or service has occurred.</p>

<p align=right style='text-align:right' 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>Cash and Cash Equivalents</i></b></p>

<p align=right style='text-align:right' 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">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 from the date of acquisition and that are subject to an insignificant
risk of change in value.</p>

<p align=right style='text-align:right' 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>Trade and Other Receivables</i></b></p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Trade
and other receivables are stated at face value, net of allowance for doubtful
accounts.</p>

<p align=right style='text-align:right' 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>Allowance for Doubtful Accounts</i></b></p>

<p align=right style='text-align:right;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">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 our ability to collect
payments.  An evaluation of the receivables, designed to identify potential
charges to the allowance, is performed on a continuous basis during the year.</p>

<p align=right style='text-align:right' 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>Subscribers</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 historical loss experience and aging
profile of the receivable.</p>

<p align=right style='text-align:right' 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 are over 360 days past due and
after a review of the status of settlement with other carriers.</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"><b><i>Inventories and Supplies</i></b></p>

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

<p style="margin-top:0;margin-bottom:0">Allowance for inventory
obsolescence is set for the difference between cost and market value of
inventories.</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"><b><i>Property, Plant and Equipment</i></b></p>

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

<p style="margin-top:0;margin-bottom:0">Property, plant and equipment,
except for land, are stated at cost less accumulated depreciation and
amortization and any impairment in value.  Land is stated at cost less any
impairment in value.</p>

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

<p 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, plus the estimated value of asset retirement obligations.  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 year 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 interests on borrowed funds used during the
construction period.  When assets are sold or retired, their costs and
accumulated depreciation, amortization and impairment losses, if any, are
eliminated from the accounts and any gain or loss resulting from their disposal
is included in the consolidated statement of income of such period.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Depreciation
and amortization are calculated on a straight-line basis over the following
estimated useful lives of the assets:</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: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>&nbsp;</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">Communications satellite</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 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">Information origination and termination 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">5 &#150; 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">Cellular 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">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">Land improvements</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">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>
</table></center></div>

<p 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 useful lives and depreciation and amortization
method are reviewed periodically to ensure that the periods and method of
depreciation and amortization are consistent with the expected pattern of
economic benefits from items of property, plant and equipment.</p>

<p 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">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 align=right style='text-align:right' 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">Interest and other costs incurred in connection with
the borrowing of funds 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="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Impairment of Assets</i></b></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">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; long-lived assets, except goodwill and intangible assets
with indefinite lives, 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
subjected to impairment test if the carrying amount 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 carrying amount 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-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Asset Retirement Obligations</i></b></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">Under
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.  SFAS 143 is effective for fiscal years beginning 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 SFAS 143, the PLDT Group 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 shorter.</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 (net of income taxes of Php29 million) (Php0.36 per share),
which is included in the consolidated 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 cumulative effect of the change in accounting policy by
Php111 million (Php0.66 per share).</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 table summarizes the changes to the liabilities on asset retirement
obligations for the years ended December 31, 2005 and 2004:</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%;margin-left:.4pt;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' 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' style="margin-top:0;margin-bottom:0"><b>2005</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' style="margin-top:0;margin-bottom:0">2004</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' 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:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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' style="margin-top:0;margin-bottom:0">Asset retirement obligations at beginning of year</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>638</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' style="margin-top:0;margin-bottom:0">395</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' style="margin-top:0;margin-bottom:0">Additional liability recognized during the year</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>63</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' style="margin-top:0;margin-bottom:0">177</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' style="margin-top:0;margin-bottom:0">Settlement of obligations</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(28)</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' 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-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Accretion 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:9.0pt;text-align:right' 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:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.95pt;text-align:right' style="margin-top:0;margin-bottom:0">66</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.1pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:12.1pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Asset retirement obligations at end of year (Note 13)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:12.1pt'>
 <p align=right style='margin-right:9.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 752</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:12.1pt'>
 <p align=right style='margin-right:8.95pt;text-align:right' style="margin-top:0;margin-bottom:0"> 638</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-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='margin-bottom:0in;margin-bottom:.0001pt' 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 tangible and intangible assets acquired.  Goodwill is recorded at the fair
value less any impairment.  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.  Other
than goodwill, we have no indefinite-lived intangibles.</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' style="margin-top:0;margin-bottom:0"><b><i>Debt Issuance Costs</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:40.5pt' 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
issuance costs are charged to operations when the related debt is extinguished.</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' style="margin-top:0;margin-bottom:0"><b><i>Borrowing Costs</i></b></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' 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;page-break-after:avoid' 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>Retirement Costs</i></b></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' style="margin-top:0;margin-bottom:0">We
have funded noncontributory retirement plans, administered by the respective
companies&#146; Trustee, covering permanent and 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;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>Stock-Based Compensation</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">We have historically accounted for stock-based
employee compensation plans under Accounting Principles Board, or 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;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
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;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">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, or ESPP) and long-term incentive plan, or LTIP,
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, stock purchase plan and LTIP been determined
based on the fair value at the grant date of awards for years 2005, 2004 and
2003, consistent with the provision of SFAS 123, PLDT&#146;s net income in 2005
would have increased whereas in 2004 and 2003 would have decreased.  The pro
forma amounts are 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:101.2%;margin-left:.4pt;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>2005</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">2004</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">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 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=' 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 million 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 attributable to common shareholders (Note 20)</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>37,483</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>38,787</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">24,834</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">26,313</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">7,997</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">8,251</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 net income</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>824</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>824</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">239</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">239</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">14</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">14</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:.5in;text-indent:-.5in;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>(823)</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>(823)</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">(331)</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">(331)</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">(51)</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">(51)</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 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>37,484</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>38,788</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">24,742</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">26,221</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">7,960</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">8,214</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"><b> </b></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>217.84</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>211.93</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">146.32</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">145.30</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">47.20</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">45.72</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>217.84</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>211.93</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">145.77</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">144.79</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">46.99</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='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45.51</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
dilutive effect of outstanding options is reflected as additional share
dilution in the computation of earnings per common share, see <i>Note 20 &#150;
Earnings Per Common Share</i>.</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>Leases</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">Lease
obligations having provisions for bargain purchase options and ownership
transfer at the end of the lease term, with
a lease term equal to 75% or more of the estimated economic life of the leased
property, or lease obligations where the present value at the beginning of the
lease term of the minimum lease payments (excluding executory costs and taxes
to be paid or paid by the lessor and including any profit thereon) equals or
exceeds 90% of the fair value of the leased property, are capitalized.  The related obligations are
recognized as liabilities.  Minimum lease
payments are allocated between the
finance charges and reduction of the lease liability so as to achieve a
constant periodic rate of interest on the remaining balance of the
liability.</p>

<p style='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
capital lease gives rise to a depreciation expense for the asset, as well as a
borrowing cost for each period.  Finance charges are charged directly to
current operations.  The depreciation policy for leased assets is consistent
with that for depreciable assets that are owned.  </p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Leases
where the lessor retains substantially all the risks and benefits of ownership
of the asset are classified as operating leases.  Initial direct costs incurred
in negotiating an operating lease are deferred and amortized on a straight-line
method over the lease term on the same bases as the lease income.  Operating
lease payments are recognized as an expense in the consolidated statements of
income on a straight-line basis over the lease term.  For income tax reporting
purposes, expenses that should have been incurred under lease agreement are
considered as deductible expenses.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Operating
lease expense amounted to Php2,086 million, Php2,160 million and Php2,166
million in 2005, 2004 and 2003, respectively.</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>Advertising and Promotion Expenses</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">Advertising and promotions are expensed as incurred.
Advertising and promotion expenses amounted to Php4,160 million, Php5,002
million and Php2,982 million in 2005, 2004 and 2003, respectively. </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>Repairs and Maintenance 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">Repairs
and maintenance are expensed as incurred.  Repairs and maintenance expenses
amounted to Php6,705 million, Php5,671 million and Php4,931 million in 2005,
2004 and 2003, respectively. </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>Foreign Currency Transactions and Translations</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">For
each entity in the PLDT Group, transactions in foreign currencies are recorded
in the functional currency of the entity by applying to the foreign currency
amount at 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 statement 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 accounts are 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='page-break-after:avoid' 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
Company recognizes all derivatives on the consolidated balance sheet at fair
value.  Derivatives that are not designated as hedges are recognized at 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 enters into derivatives
that are meant to be economic hedges of identified underlying instruments and
are marked to market directly through earnings.</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' 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">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 rates 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, or EPS</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
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;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">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;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">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
at the same amount.</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>Management&#146;s Use of
Estimates</i></b></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">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' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' 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 deferred tax assets, pension
benefit assumptions, asset retirement obligation measurement, stock option
valuation and purchase price allocation.</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>Concentrations</i></b></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">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 in July 2003.  Political conditions
in the Philippines were generally stable during the 1990&#146;s.  In the past four
years, an increasing number of kidnappings, 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 communist Moro Islamic
Liberation Front also continues in Mindanao.</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">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:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">As
at December 31, 2005, 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 various high-quality financial institutions.</p>

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

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0"><b><i>Impact of Recently Issued Accounting Pronouncements</i></b></p>

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

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">In February 2006, the Financial Accounting Standards
Board, or FASB, issued FAS 155, &#147;Accounting for Certain Hybrid Financial
Instruments,&#148; an amendment to FAS 133 and FAS 140.  FAS 155 permits an entity
to elect fair value remeasurement for any hybrid financial instrument (with
changes in fair value recognized in earnings) if the hybrid instrument contains
an embedded derivative that would otherwise be required to be bifurcated and
accounted for separately under FAS 133.  The election to measure the hybrid
instrument at fair value is made on an instrument-by-instrument basis and is
irreversible.  The statement will be effective for all financial instruments
acquired, issued, or subject to a remeasurement event occurring after the
beginning of an entity&#146;s fiscal years beginning after September 15, 2006, with
earlier adoption permitted as of the beginning of fiscal year, provided that
financial statements for any interim period of that fiscal year have not been
issued.</p>

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

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">We are currently in the process of
evaluating any effect of the adoption of FAS 155 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;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">In November 2005, the FASB issued Staff Position, or
FSP, 115-1, &#147;The Meaning of Other-Than-Temporary Impairment and Its Application
to Certain Investments.&#148;  FSP 115-1 provides guidance for determining when an
investment is considered impaired, whether impairment is other-than-temporary,
and measurement of an impairment loss.  An investment is considered impaired if
the fair value of the investment is less than its cost. </p>

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

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">If after evaluating all available evidence and the
realizable value of an investment, its impairment is determined to be other-than-temporary,
an impairment loss should be recognized equal to the difference between the
investment&#146;s cost and its fair value.  FSP 115-1 nullifies certain provisions
of Emerging Issues Task Force, or EITF, Issue No. 03-1, &#147;The Meaning of Other-Than-Temporary
Impairment and Its Application to Certain Investments,&#148; while retaining the
disclosure requirements of EITF 03-1.  FSP 115-1 is effective for reporting
periods beginning after December 15, 2005.</p>

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

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">We are currently in the process of
evaluating any effect of the adoption of FSP 115-1 will have on our
consolidated financial statements.</p>

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

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">In May 2005, the FASB issued SFAS 154,
&#147;Accounting Changes and Error Corrections,&#148; a replacement of APB Opinion No.
20, &#147;Accounting Changes,&#148; and SFAS 3, &#147;Reporting Accounting Changes in Interim
Financial Statements&#148;.  SFAS 154 applies to all voluntary changes in accounting
principles and changes the requirements for accounting for and reporting of a
change in accounting principle.  SFAS 154 carries forward many provisions of
APB Opinion No. 20 without change, including the provisions related to the
reporting of a change in accounting estimate, a change in reporting entity, and
the correction of an error.  SFAS 154 carries forward the provisions of SFAS 3
that govern reporting accounting changes in interim financial statements.  It
requires retrospective application to prior periods&#146; financial statements of a
voluntary change in accounting principle unless it is impracticable.  APB
Opinion No. 20 previously required that most voluntary changes in accounting
principle be recognized by including in net income of the period of the change
the cumulative effect of changing to the new accounting principle.  SFAS 154
requires that a change in method of depreciation, amortization or depletion for
long-lived, nonfinancial assets be accounted for as a change in accounting
estimate that is affected by a change in accounting principle.  APB Opinion No.
20 previously required that such a change be reported as a change in accounting
principle.</p>

<p style='text-indent:.5in;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">SFAS 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005.
Earlier application is permitted for accounting changes and corrections of
errors made occurring in fiscal years beginning after June 1, 2005.</p>

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

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">We are currently in the process of
evaluating any effect of the adoption of SFAS 154 will have on our consolidated
financial statements.</p>

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

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">In March 2005, the U.S. Securities and Exchange
Commission, or U.S. SEC, issued Staff Accounting Bulletin, or SAB, 107,
&#147;Share-Based Payment,&#148; providing guidance on option valuation methods, the
accounting for income tax effects of share-based payment arrangements upon
adoption of SFAS 123 (R), and the disclosures in Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations subsequent to the adoption.
We will provide SAB 107 required disclosures upon adoption of SFAS 123 (R) on
January 1, 2006.</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">On
December 16, 2004, the FASB issued SFAS 123 (revised 2004), or SFAS 123 (R),
&#147;Share-Based Payment,&#148; which is a revision of SFAS 123.  SFAS 123 (R)
supersedes APB Opinion No. 25 and related interpretations amend SFAS 95,
&#147;Statement of Cash Flows&#148;.  Generally, the approach in SFAS 123 (R) is similar
to the approach described in SFAS 123.  However, SFAS 123 (R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the statement of income based on their fair values on the
date of grant.  Pro forma disclosure is no longer an alternative. </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' style="margin-top:0;margin-bottom:0">SFAS
123 (R) must be adopted no later than the beginning of the fiscal year
beginning after June 15, 2005.  Early adoption is permitted in periods in which
financial statements have not yet been issued.  </p>

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

<p style='text-indent:.5in;line-height:12.0pt' style="margin-top:0;margin-bottom:0">SFAS
123 (R) permits public companies to adopt its requirements using one of two
methods:</p>

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

<p style='text-indent:.5in;line-height:12.0pt' style="margin-top:0;margin-bottom:0">1.  A &#147;modified prospective&#148; method in
which compensation cost is recognized beginning with the effective date (a)
based on the requirements of SFAS 123 (R) for all share-based payments granted
after the effective date and (b) based on the requirements of SFAS 123 for all
awards granted to employees prior to the effective date of SFAS
123 (R) that remain unvested on the effective date.</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">2.  A &#147;modified retrospective&#148; method
which includes the requirements of the modified prospective method described
above, but also permits entities to restate based on the amounts previously
recognized under SFAS 123 for purposes of pro forma disclosures
either (a) all prior periods presented or (b) prior interim periods of the year
of adoption.</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 are currently in the process of evaluating any effect of the
adoption of SFAS 123 (R) will have on our consolidated financial statements.</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">In
November 2004, the FASB issued SFAS 151, &#147;Inventory Costs,&#148; an amendment of
Accounting Research Bulletin, or ARB, No. 43, Chapter 4.  SFAS 151 amends the
guidance in ARB No. 43, Chapter 4, &#147;Inventory Pricing,&#148; to clarify the
accounting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted materials (spoilage).  Among other provisions, the new rule
requires that items such as idle facility expense, excessive spoilage, double
freight, and rehandling costs be recognized as current-period charges
regardless of whether they meet the criterion of &#147;so abnormal&#148; as stated in ARB
No. 43.  Additionally, SFAS 151 requires that the allocation of fixed
production overheads to the costs of conversion be based on the normal capacity
of the production facilities.  SFAS 151 is effective for fiscal years beginning
after June 15, 2005.  The PLDT Group does not expect the adoption of SFAS 151
to have a material effect on its results of operations or financial condition.</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' style="margin-top:0;margin-bottom:0">In
December 2004, the FASB issued SFAS 153, &#147;Exchanges of Nonmonetary Assets,&#148; an
amendment of APB Opinion No. 29, &#147;Accounting for Nonmonetary Transactions&#148;.
SFAS 153 eliminates the exception from fair value measurement for nonmonetary
exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29
and replaces it with an exception for exchanges that do not have commercial
substance.  SFAS 153 specifies that a nonmonetary exchange has commercial
substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange.  SFAS 153 is effective for the
fiscal periods beginning after June 15, 2005.  The PLDT Group does not expect
the adoption of SFAS 153 to have a material effect on its results of operations
or financial condition.</p>

<p style='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:.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;&nbsp;
</b><b>Cash
and Cash Equivalents</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:100.78%;margin-left:.4pt;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>2005</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">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;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:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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>6,496</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">4,750</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>23,568</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">22,571</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>30,064</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">27,321</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">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;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%;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>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Trade
and Other Receivables</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' 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:100.78%;margin-left:.4pt;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' 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' style="margin-top:0;margin-bottom:0"><b>2005</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' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;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   colspan=2 valign=bottom style=' border:none;
 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">(in million 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">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' style="margin-top:0;margin-bottom:0"><b>24,475</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' style="margin-top:0;margin-bottom:0">24,912</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">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' style="margin-top:0;margin-bottom:0"><b>1,184</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' style="margin-top:0;margin-bottom:0">680</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:4.55pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>25,659</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' style="margin-top:0;margin-bottom:0">25,592</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 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' style="margin-top:0;margin-bottom:0"><b>18,546</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' style="margin-top:0;margin-bottom:0">18,068</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:4.55pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>7,113</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' style="margin-top:0;margin-bottom:0">7,524</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">Movements in the allowance for doubtful accounts 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='margin-left:5.4pt;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: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-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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</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 million pesos)</p>
 </td>
 </tr>
 <tr style='height:12.75pt'>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Balance at beginning of
 year</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>18,068</b></p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,214</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,750</p>
 </td>
 </tr>
 <tr style='height:12.75pt'>
 <td  valign=bottom 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=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,251</b></p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,955</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,092</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'>
 <p style='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 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,773)</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(101)</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(628)</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom 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=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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>18,546</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18,068</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,214</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">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="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 Php631 million and Php557 million
in 2005 and 2004, 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' 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, 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, of which, US$20 million remains outstanding as at
December 31, 2005, and (2) to service, administer and collect the receivables
on behalf of the Purchaser.  Under the RPD, the Purchaser has no recourse against PLDT should an eligible carrier fail
or refuse to settle the assigned/purchased receivables, except when PLDT
commits a breach of its representations and warranties under the RPD.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Sale of receivables under the RPD amounted to US$11
million (Php586 million) and US$10 million (Php576 million) for the years ended
December 31, 2005 and 2004, respectively.  Loss on sale of receivables under
the RPD amounted to US$1 million (Php75 million) for the years ended December
31, 2005 and 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:.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;&nbsp;
</b><b>Inventories
and Supplies</b></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">This
account consists of:</p>

<p style='text-indent:.5in;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:101.1%;margin-left:.4pt;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-bottom:0in;margin-bottom:.0001pt' 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' style="margin-top:0;margin-bottom:0"><b>2005</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' style="margin-top:0;margin-bottom:0">2004</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' 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:14.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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' 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' style="margin-top:0;margin-bottom:0"><b>1,393</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' style="margin-top:0;margin-bottom:0">984</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' 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' style="margin-top:0;margin-bottom:0"><b>1,002</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' style="margin-top:0;margin-bottom:0">1,895</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' 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' style="margin-top:0;margin-bottom:0"><b>253</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' style="margin-top:0;margin-bottom:0">395</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' 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' style="margin-top:0;margin-bottom:0"><b>2,648</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' style="margin-top:0;margin-bottom:0">3,274</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' 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' style="margin-top:0;margin-bottom:0"><b>1,100</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' style="margin-top:0;margin-bottom:0">1,134</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' 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' style="margin-top:0;margin-bottom:0"><b>1,548</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' style="margin-top:0;margin-bottom:0">2,140</p>
 </td>
 </tr>
</table></center></div>

<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">Movements
in the allowance for inventory obsolescence are as follows:</p>

<p style='text-indent:.5in;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:472.5pt;margin-left:5.4pt;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: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-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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</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 million 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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,134</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">729</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">614</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>479</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">577</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">251</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>(513)</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">(172)</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">(136)</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,100</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,134</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 729</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;line-height:9.0pt' 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">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 Php1,970 million and Php2,277
million in 2005 and 2004, respectively.  </p>

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

<p style='text-indent:.5in;line-height:9.0pt' 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;&nbsp;
</b><b>Property,
Plant and Equipment</b></p>

<p style='text-indent:.5in;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">This account consists of:</p>

<p style='text-indent:.5in;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:101.12%;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>2005</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">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;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=2 valign=bottom style=' border:none;
 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">(in million 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>102,988</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">98,433</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>76,423</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">70,174</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>55,841</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">58,778</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>28,391</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">27,492</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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>19,409</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">18,974</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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>6,036</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">11,185</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Information origination and 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,834</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">1,705</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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,113</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,860</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:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>294,035</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">289,601</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 accumulated depreciation and amortization</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>133,025</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">113,347</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:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>161,010</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">176,254</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='page-break-after:avoid' 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,997</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,841</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-bottom: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:
 double windowtext 2.25pt;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>173,007</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">186,095</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">Interest
capitalized for the years ended December 31, 2005, 2004 and 2003 amounted to
Php504 million, Php595 million and Php887 million, respectively.</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">In
2005 and 2003, assets impaired consist of assets of wireless and information
and communications technology segments.  Assets impaired in 2004 consist of
assets of the wireless and fixed line segments.  When impairment charges are
recognized, a new cost basis for the assets is established.</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">In
2004, certain assets with net book values aggregating Php365 million were
impaired.  These assets relate primarily to certain international facility
equipment of PLDT Global and Subic Telecom in relation to our strategic
direction to functionally integrate our international fixed line business.</p>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Property,
plant and equipment includes the following amounts for capitalized leases as at
December 31, 2005 and 2004:</p>

<p style='text-indent:.5in;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:101.04%;margin-left:.4pt;border-collapse:collapse'>
 <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='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'>
 <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, 2005</b></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=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'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">December
 31, 2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.95pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;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;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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;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=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;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;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;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;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'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.95pt'>
 <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=9 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;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 million
 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">Cost</p>
 </td>
 <td   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>361</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,039</b></p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,400</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <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   colspan=2 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">361</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">863</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,224</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:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Less accumulated depreciation</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:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>293</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>719</b></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,012</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:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 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">269</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">410</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:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">679</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom 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">&nbsp;</p>
 </td>
 <td   style=' border:none;border-bottom:double windowtext 1.5pt;
 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>  68</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 320</b></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 388</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:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 style=' border:none;border-bottom:double windowtext 1.5pt;
 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">  92</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 453</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:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 545</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>
 </tr>
</table></center></div>

<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">Depreciation
expense for assets reported under capitalized leases amounted to Php333
million, Php282 million and Php110 million in 2005, 2004 and 2003,
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
2005 and 2004, PLDT and Smart changed the estimated useful lives of certain
network assets owing to continuing network expansion and upgrade.</p>

<p style='text-indent:.5in;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">Below
is the pro forma financial information assuming no changes in accounting estimates
were made during 2005 and 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:98.14%;margin-left:5.4pt;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-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border: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   colspan=2 valign=bottom style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos, except <br>
 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</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"><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:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>40,603</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">28,101</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>45,872</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">30,319</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>
 </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>217.84</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">146.32</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>248.46</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">159.38</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>
 </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>211.93</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">145.30</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>240.72</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">157.55</p>
 </td>
 </tr>
</table></center></div>

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

<p style='text-indent:.5in;line-height:9.0pt' 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;&nbsp;
</b><b>Investments</b></p>

<p style='text-indent:.5in;line-height:9.0pt' 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">This account consists of:</p>

<p style='text-indent:.5in;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: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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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">2004</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:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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: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">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>3,409</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">3,412</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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less accumulated equity in net losses</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>3,394</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">3,404</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=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>  15</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">   8</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' style="margin-top:0;margin-bottom:0">At
 equity:</p>
 </td>
 <td   valign=bottom style=' 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>&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' 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:.25in' style="margin-top:0;margin-bottom:0">Mabuhay
 Space Holdings Limited, or MSHL</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' 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:7.65pt;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:.25in' 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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>15</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' 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-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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>  15</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' style="margin-top:0;margin-bottom:0">   8</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' style="margin-top:0;margin-bottom:0">At
 cost:</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' 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:7.65pt;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:.25in' style="margin-top:0;margin-bottom:0">Stradcom
 International Holdings, Inc., or SIHI</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' 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:7.65pt;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:.25in' 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:4.3pt;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 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;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">&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:4.3pt;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:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;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;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p 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' style="margin-top:0;margin-bottom:0"><b>  15</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;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-top:0;margin-bottom:0">Investments in debt security</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>346</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' style="margin-top:0;margin-bottom:0">286</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 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 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> 361</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 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right' style="margin-top:0;margin-bottom:0"> 294</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"><b><i>Investment of ACeS Philippines in ACeS International Limited, or AIL</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
at December 31, 2005, ACeS Philippines had a 20.23% investment in AIL, a
company incorporated under the laws 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='margin-bottom:0in;margin-bottom:.0001pt;
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 I 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;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>Investment of Mabuhay Satellite in MSHL</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' style="margin-top:0;margin-bottom:0">On
July 18, 1996, Mabuhay Satellite entered into a Joint Venture Agreement, or
JVA, 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
service which was added by SS/L aboard Agila II.  Under the terms of the JVA
SS/L is required to convey title to the additional payload service 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;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
2000, SS/L filed a Notice of Default and Termination against Mabuhay Satellite
arising from the Mabuhay Satellite&#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, or 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 at December 31,
2003, the consent of the said creditors had not been obtained, hence, the
transaction, which would have resulted in a net gain of Php175 million, was not
recognized by Mabuhay Satellite in 2003.  On March 18, 2004, the majority of
the creditors has given their consent to the settlement agreement and
therefore, the related gain was recognized in 2004.</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>Investm</i></b><b><i>ent in SIHI</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">ePLDT
has a 22.5% interest in convertible securities of SIHI, the parent company of
Stradcom Corporation, or Stradcom, 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.  SIHI has been
incurring losses from the start of operations due to Stradcom&#146;s continuous
losses and recurring excess of current liabilities over current assets.  In
addition, Stradcom is in default with respect to certain provisions of its loan
covenants.  On this basis, we recognized an impairment provision in respect of
our investment in SIHI of Php616 million in 2004.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</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='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</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 at December 31, 2005 and 2004 and for
the years ended December 31, 2005, 2004 and 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:472.9pt;;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 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=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>2005</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">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top 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=top style=' border:none;
 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">(in million pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in' 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:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>652</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">638</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Noncurrent assets</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>1,388</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">1,648</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Current liabilities</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>1,585</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">1,444</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Noncurrent liabilities</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>11,242</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">12,100</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 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Capital deficiency</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:3.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(10,787)</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:3.05pt;text-align:right' style="margin-top:0;margin-bottom:0">(11,258)</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;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:472.9pt;;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;
 background:white;padding:0in 0in 0in 0in'>
 <p align=left style='text-align:left;line-height:normal;
 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'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;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 style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">
 (in million pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=left style='text-align:left;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Revenues</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>774</b></p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,299</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,182</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">Revenues less cost of revenues</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>615</b></p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,013</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">600</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">Expenses</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>472</b></p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">592</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">758</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">Net loss</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:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>471</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:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19</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:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">926</p>
 </td>
 </tr>
</table></center></div>

<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"><b><i>Investment of ePLDT in
Debt Securities of Technology Support Services, Inc. (formerly First Advance
Multi-Media Entertainment Corp., or FAME)</i></b></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-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">On June 1, 2004, ePLDT and FAME entered into an
agreement whereby ePLDT would grant a seven-year zero-coupon loan to FAME
amounting to US$3.1 million.  Upon maturity of the loan, which is at the end of
seven (7) years from issuance, ePLDT may require FAME to redeem or pay the loan
at a redemption value amounting to US$ 6,041,000.  At any time during the life
of the outstanding loan, ePLDT may convert the loan into 20% of the total
outstanding capital stock of FAME.</p>

<p style='margin-left:.25in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;line-height:9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">On August 20, 2004, FAME changed its
corporate name into TSSI.</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-left:0in;text-indent:.5in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">On September 14, 2004, ePLDT entered into
a second agreement with TSSI whereby ePLDT would grant another seven-year zero
coupon loan to TSSI amounting to US$3.1 million with the same terms and
features as the first loan.  As at December 31, 2005, the aggregate loans of
ePLDT to TSSI amounted to US$6.2 million.</p>

<p style='margin-left:.25in;line-height:8.0pt' 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">As at December 31, 2005, ePLDT has not
yet converted its investment in debt securities into TSSI&#146;s shares of stock.
TSSI is a systems integrator for the internet and mobile telephone gaming
project.</p>

<p style='margin-left:.25in;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">The
debt instrument was initially recorded at fair value computed as the present
value of estimated future cash flows and subsequently measured at amortized
cost at effective yield.</p>

<p style='margin-left:.25in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;line-height:8.0pt' 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:.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;&nbsp;
</b><b>Goodwill
and Other Intangible Assets</b></p>

<p style='margin-left:.25in;line-height:8.0pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account consists of:</p>

<p align=right style='text-align:right;text-indent:.5in;
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:100.72%;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='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-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>2005</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">2004</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:12.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>24,419</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">24,736</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">Other intangible 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:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,779</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">2,959</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:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>28,198</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">27,695</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">Less accumulated amortization</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>11,323</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">11,134</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='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;height:7.6pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>16,875</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,561</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">Movements
in accumulated amortization of goodwill and other intangible assets are as
follows:</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:100.84%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:15.45pt'>
 <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;height:15.45pt'>
 <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;
 background:white;padding:0in 0in 0in 0in;height:15.45pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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;height:15.45pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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;height:15.45pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.45pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:12.45pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;height:12.45pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">
 (in million pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p 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;height:12.0pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,134</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,041</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,275</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p style="margin-top:0;margin-bottom:0">Amortization</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>189</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">93</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">766</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.15pt'>
 <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 0in 0in 0in;height:13.15pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Balance at end of year</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 0in 0in 0in;height:13.15pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,323</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 0in 0in 0in;height:13.15pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,134</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 0in 0in 0in;height:13.15pt'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,041</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
customers list included in other intangible assets was fully amortized as at
December 31, 2003.</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">Movements of the net carrying value of goodwill per
reportable segments 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:100.48%;margin-left:.4pt;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: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-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: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-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: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-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">Information and Communications
 Technology</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: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'>
 <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=4 valign=top style=' border:none;
 padding:0in 0in 0in 0in'>
 <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
 million pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 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">Balances as at December
 31, 2002</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">14,768</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">426</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">97</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">15,291</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">Additions during the year</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">173</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">&#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:8.25pt;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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 173</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">Balances as at December 31, 2003</p>
 </td>
 <td   valign=bottom style=' border:none;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">14,941</p>
 </td>
 <td   valign=bottom style=' border:none;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"> 426</p>
 </td>
 <td   valign=bottom style=' border:none;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">  97</p>
 </td>
 <td   valign=bottom style=' border:none;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">15,464</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">Additions during the year</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">1,019</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">&#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">90</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">1,109</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">Reclassification during the year</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">(173)</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">&#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">&#150;</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">(173)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom 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">Balances as at December 31, 2004</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,787</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 426</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 187</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,400</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">Additions during the year</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">133</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">&#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">12</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"> 145</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">Impairment during the year</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">&#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">&#150;</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">(15)</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">(15)</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">Reclassification during the year</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">(448)</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:8.25pt;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'>
 <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=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">(448)</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:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Balances as at
 December 31, 2005</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>15,472</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 426</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 184</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>16,082</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">A
substantial portion of goodwill is related to the wireless business segment due
to our acquisition of Smart and Smart Broadband (formerly Meridian Telekoms,
Inc.).  In December 2005, 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='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">On September 2, 2004, Smart entered into a sale and
purchase agreement to acquire 100% of Smart Broadband, a company primarily
engaged in providing wireless broadband and data services to small and
medium-scale enterprises in the Philippines, for a total consideration of US$45
million of which payments of US$11 million and US$7 million for an equity
interest of 40% in Smart Broadband were made in 2004 and payment of US$4
million for an additional equity interest of 9% was made in January 2005.  The
balance of US$23 million in respect of the remaining 51% equity interest in Smart
Broadband was paid on March 7, 2006.  As at December 31, 2005, the net cash
outflow on acquisition was Php1,227 million, representing cash payments of
Php1,294 million, cash acquired from Smart Broadband of Php5 million and cost
directly related to business combination of Php62 million.</p>

<p style='margin-left:.25in;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
purchase consideration has been allocated to the assets and liabilities on the
basis of fair values at the date of acquisition.  The fair values of the
identifiable acquired assets and liabilities of Smart Broadband at the time of
acquisition are as follows:</p>

<p style='margin-left:.25in;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:100.72%;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=center style='margin-right:4.65pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</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">Cash and cash
 equivalents</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Trade and other
 receivables</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;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-top:0;margin-bottom:0">Inventories and
 supplies</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' 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-top:0;margin-bottom:0">Prepayments</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;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-top:0;margin-bottom:0">Other current assets</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' 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-top:0;margin-bottom:0">Property, plant and
 equipment</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">61</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">Goodwill</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">571</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">Intangible 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:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">670</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">&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:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">1,322</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">Accrued and other current
 liabilities</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:53.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(48)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Notes payable</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:53.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(5)</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:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Deferred income tax liabilities</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:53.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(214)</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">&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:53.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(267)</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-top:0;margin-bottom:0">Net assets</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:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">1,055</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;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">Smart
Broadband has been accounted for in the consolidated financial statements using
the purchase method of accounting, which resulted in goodwill amounting to
Php571 million in 2004 and additional goodwill of Php133 million in 2005.  </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">Smart
Broadband&#146;s intangible asset composition
and estimated useful lives were 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:81.22%;margin-left:54.9pt;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' style="margin-top:0;margin-bottom:0">Licenses</p>
 </td>
 <td   valign=top style=' border:none;border-top: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">18 years</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">Spectrum</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 years</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='' style="margin-top:0;margin-bottom:0">Technology</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">5 years</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='' style="margin-top:0;margin-bottom:0">Customer list</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">3 years</p>
 </td>
 </tr>
</table></center></div>

<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">Other intangible assets consist 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:100.36%;border-collapse:collapse;width:100.36% !msorm;border-collapse:
 collapse !msorm'>

 <tr>
 <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">&nbsp;</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='text-align:center' style="margin-top:0;margin-bottom:0"><b>2005</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-top:0;margin-bottom:0">&nbsp;</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='text-align:center' style="margin-top:0;margin-bottom:0">2004</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=' 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">Gross</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">Net</p>
 </td>
 <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=' 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">Gross</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">Net</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <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 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Carrying Amount</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' style="margin-top:0;margin-bottom:0">Accumulated Depreciation</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">&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">&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">Carrying Amount</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' style="margin-top:0;margin-bottom:0">Accumulated Depreciation</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">&nbsp;</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   colspan=7 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</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">Spectrum</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">591</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(50)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0"> 541</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;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:20.9pt;text-align:right' 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:17.45pt;text-align:right' 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-top:0;margin-bottom:0">Technology
 application</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">365</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(204)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0"> 161</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">254</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(93)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0"> 161</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">Licenses</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">66</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(5)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">  61</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;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:20.9pt;text-align:right' 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:17.45pt;text-align:right' 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-top:0;margin-bottom:0">Customer list</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">2,758</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,728)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">  30</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">2,705</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,705)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' 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 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">3,780</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 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,987)</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 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0"> 793</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 0in 0in 0in'>
 <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=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">2,959</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 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,798)</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 0in 0in 0in'>
 <p align=right style='margin-right:17.45pt;text-align:right' style="margin-top:0;margin-bottom:0"> 161</p>
 </td>
 </tr>
</table></center></div>

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

<p style="margin-top:0;margin-bottom:0">The future amortization of other
intangible assets as at December 31, 2005 are as follows:</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:100.72%;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=center style='margin-right:4.65pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</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">2006</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">162</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">2007</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">78</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">2008</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">66</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">2009</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">58</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">2010</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">43</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">2011 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:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0">386</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;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:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:56.2pt;text-align:right' style="margin-top:0;margin-bottom:0"> 793</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;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">&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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>10.    Other Noncurrent Assets</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' 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:100.72%;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="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>2005</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">2004</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   colspan=2 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:12.35pt;text-align:right' style="margin-top:0;margin-bottom:0">(in million 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">Telephone
 instruments - net</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>2,420</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">3,317</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">Debt
 issuance costs - net</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>733</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">751</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">Refundable
 deposits</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>516</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">490</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">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:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>707</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' style="margin-top:0;margin-bottom:0">699</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:#E0E0E0;padding:0in 0in 0in 0in;
 height:11.2pt'>
 <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;
 height:11.2pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>4,376</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:11.2pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">5,257</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;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">&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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>11.    Accrued Expenses and
Other Current Liabilities</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' 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:100.72%;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 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>2005</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">2004</p>
 </td>
 </tr>
 <tr style='height:6.2pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:6.2pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;height:6.2pt'>
 <p align=right style='margin-right:12.35pt;text-align:right' style="margin-top:0;margin-bottom:0">(in million 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">Accrued utilities and related 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' style="margin-top:0;margin-bottom:0"><b>5,214</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">4,096</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='text-align:justify' style="margin-top:0;margin-bottom:0">Accrued
 satellite air time cost and provisions (Notes 21 and 22)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,827</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:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2,954</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:9.4pt;text-indent:-9.4pt' style="margin-top:0;margin-bottom:0">Accrued interests and other related 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:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,003</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:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2,235</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:9.4pt;text-indent:-9.4pt' 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:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,759</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:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,595</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='text-align:justify' style="margin-top:0;margin-bottom:0">Accrued
 taxes and related expenses</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>834</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:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,708</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">Others</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>2,349</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">2,175</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.55pt' style='page-break-inside:
 avoid !msorm;height:7.55pt !msorm'>
 <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;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;height:7.55pt'>
 <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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;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;height:7.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>15,986</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;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;height:7.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">14,763</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">Over the past years, PLDT has
been implementing its manpower rightsizing program, or MRP, in line with its
continuing effort to reduce the cost base of its fixed line business.  The MRP
cost charged to operations for the years ended December 31, 2005, 2004 and 2003
amounted to Php458 million, Php566 million and Php1,565 million, including a
loss on settlement of Php117 million, primarily representing charges relating
to 440, 745 and 1,862 PLDT employees affected by the program, respectively;
unrecognized past service costs, which are normally amortized over the
estimated remaining average working lives of employees, in respect of employees
who availed of the MRP are recognized as loss on settlement.  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 Labor Code of the Philippines, as amended, and is in compliance with all other relevant labor laws and regulations 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">Movements in the accrued MRP cost accounts, included
under accrual for payment for unused sick leave and other employee benefits
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='width:100.84%;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">8</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>2005</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">2004</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">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.45pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:8.45pt'>
 <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;
 padding:0in 0in 0in 0in;height:8.45pt'>
 <p align=center style='margin-right:2.2pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">                   (in
 million 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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>48</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">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">87</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">Cost for the year (Notes 18 and 24)</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>458</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">566</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">1,565</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;page-break-after:
 avoid' 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(481)</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(534)</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">(1,636)</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;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'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>  25</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">  48</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">  16</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:0in;margin-bottom:.0001pt;line-height:normal;
punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">12.    Interest-bearing Financial 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">This
account consists of 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=0 cellspacing=0 cellpadding=0
 style='width:100.72%;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:0in;margin-bottom:.0001pt;line-height:normal' 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' style="margin-top:0;margin-bottom:0"><b>2005</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' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:12.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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">&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' 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' 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"><b>Interest-bearing
 financial liabilities maturing within one year</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"><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' 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:9.4pt' style="margin-top:0;margin-bottom:0">Long-term
 debt maturing within one 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>18,797</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">28,020</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' style="margin-top:0;margin-bottom:0">Obligations
 under capital lease maturing within one year (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' 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:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">425</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt' style="margin-top:0;margin-bottom:0">Notes
 payable:</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>&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' style="margin-top:0;margin-bottom:0">&nbsp;</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:22.9pt' style="margin-top:0;margin-bottom:0">Bank
 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' 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' style="margin-top:0;margin-bottom:0">58</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">&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' style="margin-top:0;margin-bottom:0"><b>19,513</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' style="margin-top:0;margin-bottom:0">28,503</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.0pt'>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in;
 height:8.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:8.0pt'>
 <p align=right style='margin-right:7.75pt;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;
 height:8.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.0pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:8.0pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Long-term portion of
 interest-bearing financial liabilities</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.0pt'>
 <p align=right style='margin-right:7.75pt;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;height:8.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.0pt' style='page-break-inside:
 avoid !msorm;height:8.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.0pt'>
 <p style='margin-left:9.4pt' style="margin-top:0;margin-bottom:0">Long-term
 debt</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>93,516</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">131,377</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.0pt'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.0pt'>
 <p style='margin-left:9.4pt' style="margin-top:0;margin-bottom:0">Obligations
 under capital lease (Note 7)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>381</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">601</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.0pt' style='page-break-inside:
 avoid !msorm;height:8.0pt !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;height:8.0pt'>
 <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;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm;height:8.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>93,897</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;height:8.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">131,978</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"><b><i>Long-term Debt</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">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:100.78%;margin-left:.4pt;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='margin-top:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Description</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=center style='margin-top:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Interest Rates</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-top:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>2005</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-top:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">2004</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-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' 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='text-align:center' 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' style="margin-top:0;margin-bottom:0"><i>U.S.
 Dollar Debt:</i></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p 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">&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">&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">&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">&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' style="margin-top:0;margin-bottom:0">Export Credit Agencies-Supported Loans:</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=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=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=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>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Kreditanstalt f&#252;r Wiederaufbau, or KfW</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">5.65%
 - 8.03% and US$ LIBOR + 0.55% - 2.5%</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"><b>US$254</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' style="margin-top:0;margin-bottom:0"><b>Php13,489</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' style="margin-top:0;margin-bottom:0">US$351</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php19,793</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Finnish
 Export Credit or Finnvera</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">6.36%
 - 7.75% and US$ LIBOR + 0.05% and 1.30% - 1.425%</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"><b>107</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' style="margin-top:0;margin-bottom:0"><b>5,651</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' style="margin-top:0;margin-bottom:0">162</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">9,128</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:27.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Nippon Export and Investment Insurance <br>
 of Japan, or NEXI</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">US$
 LIBOR +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"><b>50</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' style="margin-top:0;margin-bottom:0"><b>2,653</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' style="margin-top:0;margin-bottom:0">75</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">4,226</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:27.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Japan Bank for International Cooperation, <br>
 or JBIC/Co-financing Banks</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">6.56%
 - 7.95% and US$ LIBOR + 0.65% - 1.55%</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"><b>&#150;</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' style="margin-top:0;margin-bottom:0"><b>&#150;</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' style="margin-top:0;margin-bottom:0">44</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">2,459</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:.25in' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">5.83%
 - 7.89% and US$ LIBOR + 0.15% - 4.30% and GOVCO&#146;s cost + 0.20%</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>28</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,478</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">104</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">5,878</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' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;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=' border:none;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"><b> 439</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' style="margin-top:0;margin-bottom:0"><b>23,271</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' style="margin-top:0;margin-bottom:0"> 736</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' style="margin-top:0;margin-bottom:0">41,484</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' style="margin-top:0;margin-bottom:0">Fixed Rate Notes</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">7.85%
 - 11.375%</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"><b>998</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' style="margin-top:0;margin-bottom:0"><b>52,980</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' style="margin-top:0;margin-bottom:0">1,236</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">69,652</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-align:justify' style="margin-top:0;margin-bottom:0">Term Loans:</p>
 </td>
 <td   valign=top 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"><b>&nbsp;</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' 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: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">&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:17.6pt' style="margin-top:0;margin-bottom:0">Debt
 Exchange Facility</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">2.25%
 and US$ LIBOR + 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"><b>283</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' style="margin-top:0;margin-bottom:0"><b>15,030</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' style="margin-top:0;margin-bottom:0">283</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">15,959</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:17.6pt' style="margin-top:0;margin-bottom:0">GSM
 Network Expansion Facilities</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">4.49%
 and US$ LIBOR + 3.25%</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"><b>87</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' style="margin-top:0;margin-bottom:0"><b>4,632</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' style="margin-top:0;margin-bottom:0">126</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">7,089</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:26.6pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Nederlandse Financierings-Maatschappij <br>
 Voor Ontwikkelingslanden N.V.,
 or FMO</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">US$
 LIBOR + 1.95% - 2.05%</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"><b>&#150;</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' style="margin-top:0;margin-bottom:0"><b>&#150;</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' style="margin-top:0;margin-bottom:0">51</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">2,862</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:17.6pt' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">5.83%
 and US$ LIBOR + 0.40% - 3.625%</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"><b>19</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' style="margin-top:0;margin-bottom:0"><b>978</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' style="margin-top:0;margin-bottom:0">33</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">1,863</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' style="margin-top:0;margin-bottom:0">Restructured Loans</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">US$
 LIBOR + 1%</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"><b>119</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' style="margin-top:0;margin-bottom:0"><b>6,305</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' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,702</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' style="margin-top:0;margin-bottom:0">Satellite Acquisition Loans</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">US$
 LIBOR + 1.75% and 5.6%</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"><b>57</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' style="margin-top:0;margin-bottom:0"><b>3,040</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' 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 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,064</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">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;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=' 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' style="margin-top:0;margin-bottom:0"><b>US$</b><b>2,002</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' style="margin-top:0;margin-bottom:0"><b>106,236</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' style="margin-top:0;margin-bottom:0">US$2,656</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' style="margin-top:0;margin-bottom:0">149,675</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=top style=' border:none;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=' 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"><b>&nbsp;</b></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"><b>&nbsp;</b></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=' 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>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#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">&nbsp;</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' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#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">&nbsp;</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' style="margin-top:0;margin-bottom:0"><i>Japanese
 Yen Debt:</i></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#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">&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:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">JBIC&#146;s Overseas Investment Loan, or OIL</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">2.125%</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"><b>JP&yen;6,970</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' style="margin-top:0;margin-bottom:0"><b>3,139</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' style="margin-top:0;margin-bottom:0">JP&yen;9,760</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">5,363</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Export Credit Agency-Supported Loan:  <br>
 NEXI Supported Loan</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">JP&yen;
 LIBOR + 1.70%</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"><b>1,575</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' style="margin-top:0;margin-bottom:0"><b>710</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' style="margin-top:0;margin-bottom:0">2,205</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">1,212</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:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify' 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;
 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=' 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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>JP&yen;</b><b>8,545</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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,849</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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">JP&yen;11,965</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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,575</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;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=' 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"><b>&nbsp;</b></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"><b>&nbsp;</b></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=' 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>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0"><i>Philippine
 Peso Debt:</i></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#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">&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;text-align:justify' style="margin-top:0;margin-bottom:0">Peso Fixed Rate Corporate Notes</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">14%
 - 15.816%</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"><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' style="margin-top:0;margin-bottom:0"><b>1,580</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' 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' style="margin-top:0;margin-bottom:0">1,680</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' style="margin-top:0;margin-bottom:0">Term Loans:</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <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:#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">&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:17.6pt;text-align:justify' style="margin-top:0;margin-bottom:0">JBIC 4 Program</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">11.18%</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"><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' 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' 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' style="margin-top:0;margin-bottom:0">680</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:17.6pt;text-align:justify' style="margin-top:0;margin-bottom:0">Secured Term Loans</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">11.6%
 - 24% and 91-day T-Bill <br>
 + 4%; 90-day PHIBOR + 3%</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"><b>&#150;</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' style="margin-top:0;margin-bottom:0"><b>166</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' 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' style="margin-top:0;margin-bottom:0">305</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' style="margin-top:0;margin-bottom:0">Restructured Loans</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">91-day
 T-Bill + 1%</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"><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' style="margin-top:0;margin-bottom:0"><b>482</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' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">482</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' 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 style='margin-right:2.9pt' 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:2.9pt;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 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,228</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' 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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,147</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' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;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=' border:none;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"><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' style="margin-top:0;margin-bottom:0"><b>112,313</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' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">159,397</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' style="margin-top:0;margin-bottom:0">Less
 portion maturing within one year</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;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=' 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' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>18,797</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' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">28,020</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='margin:0in;margin-bottom:.0001pt;punctuation-wrap:
 hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">Long-term debt - net of
 current portion</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;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=' 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' style="margin-top:0;margin-bottom:0"><b>&nbsp;</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' style="margin-top:0;margin-bottom:0"><b>Php93,516</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' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php131,377</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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">The scheduled maturities of our outstanding
consolidated long-term debt as at December 31, 2005 are as follows:</p>

<p align=right style='margin-left:.25in;text-align:right;
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:100.88%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 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=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-right:7.75pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>U.S. Dollar Loans</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-right:7.75pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>JP</b><b>Y</b><b> Loans</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=center style='margin-right:.25pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Php Loans</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=center style='margin-right:7.75pt;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=' border:none;border-bottom:
 solid windowtext 1.0pt;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='margin-right:.05pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In U.S. Dollar</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='margin-right:4.65pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In Php</b></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:4.65pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In JP</b><b>Y</b></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:4.65pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In Php</b></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:4.65pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In Php</b></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:4.65pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In Php</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;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=6 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:7.75pt;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=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Year</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;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'>
 <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   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.6pt;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:13.05pt;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:18.25pt;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:10.45pt;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='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:22.55pt;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'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,328</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,418</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,539</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:18.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">930</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:10.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18,797</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">2007</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">347</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18,418</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,418</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,540</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:18.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">35</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:10.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,993</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">2008</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">110</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,839</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,709</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">770</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:18.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:10.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,633</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">2009</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">266</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,121</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.6pt;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 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;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'>
 <p align=right style='margin-right:18.25pt;text-align:right;
 page-break-after:avoid' 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:10.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,146</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">2010</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,552</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.6pt;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:13.05pt;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:18.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">834</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:10.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,386</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">2011 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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">923</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:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48,978</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:13.6pt;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:13.05pt;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:18.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">380</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:10.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">49,358</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,002</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:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">106,236</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:13.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,545</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:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,849</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:18.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,228</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:10.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">112,313</p>
 </td>
 </tr>
</table></center></div>

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

<p style="margin-top:0;margin-bottom:0"><i><u>U.S. Dollar Debt:</u></i></p>

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

<p 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 obtained
loans extended and/or guaranteed by various export credit agencies.  These
financings account for a significant portion of our indebtedness.</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>Kreditanstalt f&#252;r Wiederaufbau, or KfW</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">KfW,
a German state-owned development bank, is PLDT&#146;s largest single creditor.  As
at December 31, 2005, we owed US$254 million aggregate principal amount of debt
to KfW, as follows:</p>

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

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;
     US$196 million provided under
various export credit agency-backed facilities, of which US$86 million was in
connection with our expansion and service improvement programs and US$110
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;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;      US$58 million provided for the 15% downpayment
portion and credit facilities without guarantee/insurance cover from the export
credit agencies, of which US$30 million was in connection with the US$149
million refinancing facility discussed in the following paragraphs.</p>

<p style='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, which provided PLDT
with a US$149 million facility to refinance in part the repayment installments
under its 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.  We have drawn US$140 million (Php7,426
million) under this facility as at December 31, 2005.  PLDT waived further
disbursements under this refinancing facility effective September 1, 2004.
Thus, the undrawn portion of US$9 million was cancelled.</p>

<p style='margin-left:.25in' 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
the amounts outstanding under these KfW loans, US$51 million of our KfW loans
will mature in 2006, US$73 million will mature in 2007, US$55 million will
mature in 2008, US$44 million will mature in 2009 and US$31 million will mature
in 2010.  Principal amortizations on these loans are generally payable in equal
semi-annual installments.</p>

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

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Finnish
Export Credit plc, or Finnvera</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">As
at December 31, 2005, US$107 million aggregate principal amount of Smart&#146;s
debts were provided by various banks under export credit agency-backed
facilities in connection with Smart&#146;s GSM expansion programs.  These facilities
are covered by guarantees from Finnvera, the Finnish export credit agency, for
95% of political risk and 50% of commercial risk for the GSM Phases 3 and 4
loan facilities and 100% of political and commercial risk for the refinancing
facility of GSM Phases 5A and 5B.  Final repayment in the aggregate amount of
US$5.8 million for GSM Phases 1 and 2 loan facilities was made on October 31,
2005.</p>

<p style='margin-left:.25in' 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 US$100 million refinancing facility was obtained on
February 11, 2005 in relation to Smart&#146;s GSM Phases 5A and 5B loans which were
prepaid last March 1, 2005 with outstanding balances of US$60 million and US$41
million, respectively, at the time of prepayment.  This refinancing facility is
payable semi-annually over five years starting September 1, 2005 with final
repayment due in March 2010.  The principal benefit of refinancing the Phase 5
loan was the savings from a lower interest margin on the refinancing facility.</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">Of
the amounts outstanding under these Finnvera guaranteed loans, US$37 million
will mature in 2006, US$20 million will mature in 2007, US$20 million will
mature in 2008, US$20 million will mature in 2009 and US$10 million will mature
in 2010.  Principal amortization on these loans are generally payable in equal
semi-annual installments.</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>Nippon
Export and Investment Insurance of Japan, or NEXI</i></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">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 US$40 million on April 5, 2004.  This loan is payable semi-annually over four years in eight equal
installments starting May 28, 2004 with final repayment due in November 2007.
The outstanding balance as at December 31, 2005 was US$50 million.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Japan
Bank for International Cooperation, or JBIC/Co-financing Banks</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">As
at December 31, 2005, PLDT has fully paid its U.S. dollar loans with JBIC
(formerly the Export-Import Bank of Japan) and the co-financing banks.</p>

<p style='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
Export Credit Agency Supported Loans</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">PLDT
has also obtained loans extended and/or guaranteed by other export credit
agencies, including the Export-Import Bank of the United States, and the
respective export credit agencies of France, Italy, Israel, Sweden and Australia, in the aggregate outstanding principal amount of US$23 million as at December 31, 2005.  Smart, likewise, obtained loans guaranteed by the export credit
agencies of Norway and Italy amounting to US$5 million.  Of the amounts
outstanding under these loans, US$14 million will mature in 2006, US$8 million
will mature in 2007, US$4 million will mature in 2008, US$1 million will mature
in 2009 and US$1 million will mature in 2010.</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>Fixed Rate Notes</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='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT has the following non-amortizing fixed rate notes
outstanding as at December 31, 2005 and 2004:</p>

<p align=right style='margin-bottom:0in;
margin-bottom:.0001pt;text-align:right;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:100.96%;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">Principal</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">Interest</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Maturity</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-top:solid windowtext 1.5pt;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=' border:none;
 border-top:solid windowtext 1.5pt;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>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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>Amount</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>Rate</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>Date</b></p>
 </td>
 <td   colspan=3 valign=bottom 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">2005</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">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 <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   colspan=5 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">(in millions)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$300,000,000</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8.350%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">March 6, 2017</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>US$299</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>Php15,874</b></p>
 </td>
 <td   colspan=2 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">US$299</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">Php16,852</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$250,000,000</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11.375%</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">May 15, 2012</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>250</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>13,265</b></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">250</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">14,085</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$138,308,000</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7.850%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">March 6, 2007</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>138</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>7,339</b></p>
 </td>
 <td   colspan=2 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">184</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">10,362</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$175,000,000</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10.500%</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">April 15, 2009</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>175</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>9,272</b></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">175</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">9,841</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$115,169,000</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9.250%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">June 30, 2006</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>115</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>6,110</b></p>
 </td>
 <td   colspan=2 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">130</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">7,310</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.5pt;text-align:right' style="margin-top:0;margin-bottom:0">US$110,557,000</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.55pt;text-align:right' style="margin-top:0;margin-bottom:0">9.875%</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0">August 1, 2005</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">110</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,229</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.5pt;text-align:right' style="margin-top:0;margin-bottom:0">US$  21,110,000</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.55pt;text-align:right' style="margin-top:0;margin-bottom:0">10.625%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0">May 15, 2007</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"><b>21</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' style="margin-top:0;margin-bottom:0"><b>1,120</b></p>
 </td>
 <td   colspan=2 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">88</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">4,973</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td style='border:none;padding:0in 0in 0in 0in'  ><p style="margin-top:0;margin-bottom:0">&nbsp;</td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#F3F3F3;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-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-right:10.7pt;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 1.5pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-right:9.05pt;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 1.5pt;border-right:none;
 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"><b>US$</b><b>998</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:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php52,980</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 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">US$1,236</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:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php69,652</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='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>Consent Solicitation for 2012 Notes and Tender Offer and Consent
Solicitation for 2007 Notes</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">On
October 6, 2005, PLDT commenced a solicitation of consents from holders of its
outstanding 11.375% Notes due 2012, or the 2012 Notes, to amend certain
covenants under the 2012 Notes relating to the limitation on restricted
payments and the limitation on indebtedness.  In addition, PLDT commenced a
cash tender offer for the aggregate principal amount of US$71,986,000 of its
10.625% Notes due 2007, or the 2007 Notes, outstanding and a related
solicitation of consents to effect identical amendments to the 2007 Notes.</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
consent solicitation for the 2012 Notes expired on October 27, 2005, and the
tender offer and consent solicitation for the 2007 Notes expired on November 4,
2005.  At the expirations, PLDT had received and accepted for payment:</p>

<p style='line-height:9.0pt' 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">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
consents from holders of
US$219,576,000 principal amount of the 2012 Notes representing approximately
87.83% of the US$250,000,000 aggregate principal amount of the 2012 Notes
outstanding;</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">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
consents from holders of
US$65,421,000 principal amount of the 2007 Notes (including the tendered 2007 Notes),
representing approximately 90.88% of the US$71,986,000 aggregate principal
amount of the 2007 Notes 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;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
tenders by holders of
US$50,876,000 of the principal amount of the 2007 Notes.</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">PLDT
received the requisite consents to effect the amendments to both the 2007 Notes
and the 2012 Notes, which give PLDT greater flexibility to make certain
restricted payments, including payment of dividends to holders of PLDT&#146;s common
stock, and reduce PLDT&#146;s permitted leverage ratio pursuant to the terms of the
notes.</p>

<p style='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 8, 2005, PLDT paid an aggregate of:</p>

<p style='line-height:9.0pt' 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">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$1,097,880 with respect to
consents delivered by the 2012 noteholders, or a consent fee of US$5 for each
US$1,000 principal amount of the 2012 Notes;</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">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$72,725 with respect to consents
delivered by non-tendering the 2007 noteholders, or a consent fee of US$5 for
each US$1,000 principal amount of the 2007 Notes not tendered; 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">c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$55,836,160 (comprising of
tender consideration of US$55,582,030 and related consent fees of US$254,130)
with respect to the tenders by 2007 noteholders, or US$1,097.50 for each
US$1,000 principal amount of the 2007 Notes tendered, representing (i) tender
offer consideration of US$1,092.50 and (ii) consent payment of US$5, plus
accrued and unpaid interest on the principal amount of the tendered 2007 Notes
up to, but not including, the settlement date. </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
at November 8, 2005, the aggregate principal amount of the 2007 Notes
outstanding was US$21,110,000.</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>Term Loans</i></p>

<p style='line-height:9.0pt;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>US$283 Million Term Loan Facility, or Debt Exchange
Facility</i></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">On July 2, 2004, Smart acquired from Piltel&#146;s
creditors approximately US$289 million, or 69.4%, in the aggregate of Piltel&#146;s total
outstanding restructured debt at that time, in exchange for Smart debt and a
cash payment by Smart.  In particular, Smart paid an amount in cash of US$1.5
million, or Php84 million, and issued new debt of US$283.2 million, or
Php15,854 million in July 2004.</p>

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

<p style='text-align:justify;text-indent:.5in' style="margin-top:0;margin-bottom:0">The breakdown of the total amount of Smart debt issued
to participating Piltel creditors is as follows:</p>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in' 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;
     2007 Facility in the amount
of US$0.2 million payable in full in December 2007;</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;
     2008 Facility in the amount
of US$2.9 million payable in full in December 2008; and</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;
     2014 Facility in the amount
of US$280.1 million payable in full in June 2014.</p>

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

<p style="margin-top:0;margin-bottom:0">As at July 2, 2004, the estimated
future cash flows for the Smart newly issued debt amounted to Php19,507
million, as determined using undiscounted cash flows.  The difference between
the sum of future cash flows for newly issued debt of Php19,507 million and
cash settlement of Php84 million, and the Php22,211 million Piltel cancelled
debt was recognized as gain on debt restructuring in the 2004 consolidated
statement of income.  The total gain from the debt restructuring amounted to
Php2,620 million (Php15.44 per share) including the gain of Php241 million from
the cash settled debt of Piltel.  The difference between the future cash flows
of the newly issued debt of Php19,507 million and the value of new debt of
Php15,854 million was deferred and presented as part of &#147;Remaining excess of
debt forgiven over value of consideration given&#148; account in the consolidated
balance sheets in conformity with the accounting for troubled debt
restructuring.  Thereafter, interest incurred on the new debt is recorded as an
offset against &#147;Remaining excess of debt forgiven over value of consideration
given&#148;.  Total interest incurred related to the new debt for the years ended
December 31, 2005 and 2004 amounted to Php398 million and Php199 million,
respectively.  As at December 31, 2005 and 2004, the balance of &#147;Remaining
excess of debt forgiven over value of consideration given&#148; account for this
restructuring amounted to Php3,056 million and Php3,454 million, respectively,
after giving effect to the above interest expense.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Interest
for the above facilities is payable every quarter at a floating rate of three
months US$ LIBOR plus 1.00% for the 2007 and 2008 facilities, and a fixed rate
of 2.25% per annum for the 2014 facility.  Furthermore, a portion of the 2014
facility amounting to US$144 million has a variable yield option whereby the
creditors have an option to elect for an early repayment at a discount either
in December 2007 at 52.5% of the relevant debt amount or in December 2008 at
57.5% of the relevant debt amount.</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>GSM Network Expansion Facilities</i></p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On
September 13, 2004, Smart signed a US$104 million 5-year term loan facility
supported by Finnish Export Credit Ltd. as the lender with ABN AMRO Bank,
Banque National de Paribas, Calyon, DBS Bank and Sumitomo Mitsui Banking
Corporation as the Lead Arrangers.  The full amount of the facility was drawn
in November 22, 2004, of which US$83 million remained outstanding as at March
31, 2006.  The loan is payable over five years in ten equal semi-annual
payments starting May 2005 with final repayment in November 2009.  </p>

<p 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">On June 8, 2001, Smart signed its GSM
Phase 5A financing comprised of US$195 million loans, of which US$30 million is
owed to Nordic Investment Bank, or NIB, US$15 million to Nederlandse
Financierings-Maatschappij Voor Ontwikkelingslanden N.V., or FMO, of the
Netherlands and US$150 million to Finnvera.   The NIB loan balance of US$12.0
million was prepaid in full on December 8, 2005, and the FMO loan balance of
US$4.09 million was prepaid in full on March 1, 2006.</p>

<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>Undrawn
Facilities</i></p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">On August 8, 2005, Smart signed a US$30 million
commercial facility with NIB to partly finance the related Phase 8 GSM
equipment and services contracts.  The facility is a 5-year term loan payable
semi-annually in 10 equal installments commencing six months from the first
drawdown date at a floating rate of US$ LIBOR plus .815% margin per annum with
an option to fix the rate prior to the drawdown date.  The facility is expected
to be drawn in the third quarter of 2006.</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
August 10, 2005, Smart signed a loan facility for its GSM Phase 8 financing in
the amount of US$70 million.  The facility was awarded to the Bank of Tokyo
Mitsubishi Ltd., Mizuho Corporate Bank Ltd, Standard Chartered Bank and
Sumitomo Mitsui Banking Corporation as the Lead Arrangers, with Finnish Export
Credit Ltd., as the Lender on Record.  Smart opted to utilize only a total of
US$67 million which was drawn in February 15, 2006 and March 13, 2006 for US$10
million and US$57 million, respectively.  The balance of US$3 was canceled.
After a partial repayment on March 1, 2006, US$66 million remained outstanding
as at March 31, 2006.  The facility is a 5-year term loan with final repayment
on September 1, 2010.  Interest is payable semi-annually at a fixed rate of
4.515% per annum.  </p>

<p style='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>Local </i><i>Exchange
Transfer Loans</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 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.  The FMO loan with original final maturity of
September 1, 2007 was prepaid in full on March 1, 2005.  The ECGD and EKN
loans, both with original final maturity on December 31, 2007, were prepaid in
full on June 30, 2005.</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>US$12 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='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' 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, or
DEG.  As of December 31, 2005, this loan had an outstanding balance of US$4
million.  The US$4 million undrawn portion of the US$12 million term loan
facility was cancelled pursuant to a request by PLDT to DEG effective September
26, 2004.  The outstanding balance of this loan was repaid in full on June 16,
2006.</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>Restructured Loans</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">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, representing 98% of
its total liabilities as at that date.</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">As a
result of the restructuring:</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">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
50% of the financial debt of each
participating creditor was released in consideration for the allotment of
Piltel Series K Class I Convertible Preferred Stock.  One (1) Piltel Series K
Class I Convertible Preferred Stock was exchanged for every Php340 worth of
debt (converted into Pesos at an exchange rate of Php47.05 = US$1.00 for
dollar-denominated debt and Php1.00 = JP&yen;2.39522 for yen-denominated debt),
which shares were immediately and mandatorily converted into PLDT Convertible
Preferred Stock.  One PLDT Series V, VI or VII Convertible Preferred Stock was
issued for every five (5) Piltel Series K Class I Convertible Preferred Stock.</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">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Approximately half of the
remaining 50% of all participating creditors&#146; (except for bondholders and
preferred shareholders) financial debt became their participation in a Tranche
B Loan in the same currency as their previous financial debt and the other half
became their 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 became a participation
in the Conversion Notes Facility and in a single Tranche Peso loan, or the Term
Notes Facility, respectively.</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">Piltel&#146;s
residual long-term debt to third parties that was not exchanged in the debt
exchange offer conducted by Smart in 2004 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:100.3%;margin-left:.4pt;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='margin-right:.05pt;text-align:center' 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='text-align:center' style="margin-top:0;margin-bottom:0"><b>2005</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='text-align:center' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;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   colspan=4 valign=top style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Restructured debts</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;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:.05in;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='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='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'>
 <p style='margin-left:9.4pt' 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='margin-right:.05in;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'>
 <p align=right style='margin-right:.05in;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'>
 <p align=right style='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'>
 <p align=right style='text-align:right' 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:18.4pt' 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:.05in;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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php241</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php241</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt' style="margin-top:0;margin-bottom:0">15
 year Tranche C</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"><b>&nbsp;</b></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"><b>241</b></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='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">241</p>
 </td>
 </tr>
 <tr>
 <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 style='margin-left:9.0pt' 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='margin-right:.05in;text-align:right' 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;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>482</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='margin-right:.05in;text-align:right' 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='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">482</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt' style="margin-top:0;margin-bottom:0">U.S.
 Dollars</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;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:.05in;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:.05in;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:.05in;text-align:right' 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:18.4pt' 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$10</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">US$10</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">548</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt' style="margin-top:0;margin-bottom:0">15
 year Tranche C</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"><b>10</b></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"><b>515</b></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">10</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">548</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:18.4pt' 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:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>99</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,275</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">99</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">5,606</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' 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$</b><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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>6,305</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">US$119</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">6,702</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>6,787</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">7,184</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt' 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' 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=' 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>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Unrestructured debt</b></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"><b>&nbsp;</b></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"><b>&nbsp;</b></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='margin-right:.05in;text-align:right' 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:9.0pt' style="margin-top:0;margin-bottom:0">U.S.
 Dollars</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;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:.05in;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:.05in;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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</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:.25in' style="margin-top:0;margin-bottom:0">Convertible
 bonds</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$1</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>49</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">US$1</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>6,836</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">7,236</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' 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:.05in;text-align:right' 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>120</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:.05in;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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">59</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:.25in' 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'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php6,716</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:.05in;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:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php7,177</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
following is a summary of the key economic terms relating to the restructuring
of the financial debt taking the form of Tranche B Loan, Tranche C Loan, Term
Notes Facility and Conversion Notes Facility.</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:98.06%;margin-left:5.4pt;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' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom 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' style="margin-top:0;margin-bottom:0"><b>Tranche B Loans</b></p>
 </td>
 <td   valign=bottom 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' style="margin-top:0;margin-bottom:0"><b>Tranche C Loans</b></p>
 </td>
 <td   valign=bottom 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' style="margin-top:0;margin-bottom:0"><b>Term Notes Facility</b></p>
 </td>
 <td   valign=bottom 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' 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;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:3.0pt' 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;
 background:#E0E0E0;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' style="margin-top:0;margin-bottom:0">10 years from June 4, 2001</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-top:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">15 years from June 4, 2001</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-top:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">15 years plus 10 days<br>
 from June 4, 2001</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-top:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">15 years from June 4, 2001</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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Amortization</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;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-right:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;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-right:solid windowtext 1.0pt;
 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=' border:none;border-right:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 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=' border:none;border-right:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;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-right:solid windowtext 1.0pt;
 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=' border:none;border-right:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 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=' border:none;border-right:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;
 background:#F3F3F3;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-right:solid windowtext 1.0pt;
 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=' border:none;border-right:solid windowtext 1.0pt;
 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=' border:none;border-right:solid windowtext 1.0pt;
 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=' border:none;border-right:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p 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;
 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=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 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=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='' 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;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Interest rate</p>
 <p 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;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0"><b>Peso facility</b>
 &#150; Philippines 91-day treasury bill rate, or T-Bill Rate, or the average of
 the 91-day T-Bill Rate and the 90-day Philippine inter-bank offered rate, or
 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' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0"><b>U.S. dollar facilities</b> &#150; London interbank rate for U.S. dollar deposits, or
 LIBOR, for three-month U.S. dollar deposits plus 1.00% p.a.</p>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0"><b>Yen facility</b>
 &#150; LIBOR interbank rate for Yen deposits for three-month 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;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">181-day T-Bill Rate or the average of the 181-day
 T-Bill Rate and the 6-months PHIBOR, if 6-months 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;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">LIBOR for three-month deposits plus 1.00% p.a.</p>
 <p style='text-align:justify' 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;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' 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;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' 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='margin-left:0in;text-indent:.5in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">Under the terms of Piltel&#146;s debt
restructuring plan, PLDT issued a Letter of Support, or LOS, 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 or any of its
subsidiaries or affiliates on or after March 23, 2000.  Under the LOS, PLDT is
required to provide funding to Piltel in the event that the cash flow from
Piltel&#146;s operations falls short of the amount required by it to discharge in
full its obligations to any creditor of Piltel and all its operating and
financing subsidiaries and affiliates.  PLDT is subject to contractual
restrictions limiting the amount of financial support it can provide to Piltel
up to US$150 million.  As at December 31, 2005 and 2004, the remaining undrawn
balance available under the PLDT LOS was US$50 million, approximately Php2,666
million (2005) and Php2,831 million (2004), due to prior investments made from
March 23, 2000 to December 31, 2002 aggregating to US$100 million through
PLDT&#146;s subscription to Series J Class I preferred shares of Piltel.  There has
been no drawdown under the LOS in 2005 and 2004.</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">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 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 participating holders of
the Peso Term Note Facility) will share equally in first ranking security,
while non-participating creditors and the participating holders of the Peso
Term Note Facility will share equally in second ranking security created under
the MTI.  Such mortgage was approved by at least two-thirds of Piltel&#146;s
stockholders at its annual meeting on April 18, 2001 and the NTC on May 18,
2001.</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">Piltel
likewise agreed to pay into a dedicated account (a Sinking Fund Account) the
amount by which earnings before interest, tax, depreciation and amortization,
and exceptional items for a financial year is greater than 200 percent of the
projected debt service costs and permitted capital expenditure for the
following financial year (the Excess Cash flow).  The money in that Sinking
Fund Account will be used (before any drawings are made under the LOS) 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 Account 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 the
Sinking Fund Account after two financial years will be used to prepay all
participating creditors on a pro rata basis.  On June 5, 2006, Piltel made a
partial voluntary prepayment under its Philippine peso facility, U.S. dollar
facilities, Japanese yen facility and notes indenture.  The amount of the
voluntary prepayment is equivalent to the excess cash flow from the operations
of Piltel&#146;s business.  The voluntary prepayment was made in lieu of depositing
those funds into a Sinking Fund Account.  The aggregate voluntary prepayment
amount was Php9,454 million, or US$179 million, which was applied
proportionally to the various debt facilities as set out in the intercreditor
agreement dated June 4, 2001.</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>Satellite Acquisition Loans</i></p>

<p 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">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 of the United States 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&#189; years to July 15, 2007 and reducing the interest rate by 1% to
5.6%.  The revised repayment terms have been approved by the majority of the
local creditor banks.</p>

<p style='margin-left:.25in' 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">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$21 million (Php1,107 million) in favor of U.S. Ex-Im
Bank, as security under the Credit Agreement and a term loan to Mabuhay
Satellite in the aggregate amount of US$36 million (Php1,934 million), which
will mature on various dates from 2006 to 2007. </p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Mabuhay Satellite has constituted in favor of the
Banks: (a) a first mortgage on its leasehold rights under a lease agreement
entered into with the Subic Bay Metropolitan Authority and the components of
the satellite system; (b) an assignment of its rights under its purchase
contract for the satellite system; (c) an assignment of its rights under the
transponder lease contracts to be entered into with its shareholders and other
parties and the revenues therefrom; and (d) an assignment of the applicable
proceeds of insurance to be taken on the satellite system.</p>

<p style='margin-left:.25in;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">As
of the date of this report, Mabuhay Satellite and the Banks are under
negotiations for the extension of maturity dates in respect of the existing
Omnibus Agreement.</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><u>Japanese Yen Debt:</u></i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' 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>JBIC JP&yen;9,760 Million Overseas </i><i>Investment</i><i>
Term Loan</i></p>

<p 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 JBIC&#146;s OIL program.  The loan, which was drawn on July 31, 2002, is being 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='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>NEXI Supported JP&yen;5,615 Million</i> <i>Syndicated Term Loan Facility</i></p>

<p 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">On June 11, 2003, PLDT signed a JP&yen;5,615
million syndicated term loan facility supported by NEXI, <br>
of which JP&yen;2,520 million was drawn and JP&yen;1,575 million was outstanding as at
December 31, 2005.  The undrawn balance of JP&yen;3,095 million was cancelled at
the end of the Availability Period on December 3, 2004.  All outstanding amounts under this facility supported by NEXI were repaid in full on June 13, 2006.</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><u>Philippine Peso Debt:</u></i></p>

<p style='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>Php2,</i><i>770</i><i> 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-left:0in;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='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;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 matured on November 9, 2004 and Php770 million will mature on November 9, 2006.</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
the second loan agreement, PLDT borrowed an aggregate amount of Php1,270 million, of which Php360
million matured on June 9, 2003, Php100
million matured on June 9, 2005 and Php810
million will mature on June 9, 2010.</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>JBIC 4 Program of the Development Bank of the Philippines</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 Asia Pacific Cable Network 2 project, PLDT entered into a
loan agreement on September 28, 2000 with Citibank, N.A., as facility agent,
and a syndicate of banks in the aggregate principal amount of Php1,700 million.
The loan, which was funded under the JBIC Facility for Private Sector
Development of the Development Bank of the Philippines and amortized in 15
quarterly installments matured and was paid on October 26, 2005.</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>Secured Term Loans</i></p>

<p style='margin-left:.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' 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.  The loan facility was
fully drawn on December 31, 2002 and payable in seven quarterly installments,
with a grace period of one year, beginning year 2003.  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 was equivalent to 91-day T-bill
rate plus 4% per annum payable quarterly in arrears.  The loan was secured by
ePLDT&#146;s deed of assignment of receivables of a subsidiary from a foreign
customer and an investment in an associate with an original cost of Php629
million.  This loan was fully paid as at March 31, 2005.  The investment in this associate has been fully
provided for as disclosed in <i>Note 8 &#150; Investments</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"><i>Php100 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 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.  The loan facility was fully drawn as
at December 31, 2004.  The loan is to be repaid in nine equal quarterly
installments starting March 2005 with final repayment 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, or
MTIA, on a parcel of land with a carrying value of Php279 million as at
December 31, 2004.  As at December 31, 2005, the outstanding balance of this
loan amounted to Php56 million, of which Php44 million will mature in the last
quarter of 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"><i>Php149
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">As
at December 31, 2005, Vocativ, a wholly-owned call center subsidiary of ePLDT,
had an outstanding five-year term loan facility of Php109 million with Asia
United Bank for the payment of its additional capital expenditures and working
capital requirements.  The loan is to be repaid in 14 equal quarterly
installments starting April 2006 with final repayment in July 2009.  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 Participation Certificate against
the MTIA between ePLDT and Asia United Bank Corporation &#150; Trust and Investments
Group dated March 15, 2004 on a parcel of land, which excludes the buildings
and improvements.  In 2005, Vocativ prepaid Php40 million of the loan.</p>

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

<p style="margin-top:0;margin-bottom:0"><i>Unsecured Term Loans</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>Php1,000
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
June 14, 2001, Smart signed its GSM Phase 5A financing of Php1,000 million term
loan.  The outstanding balance under this facility of Php467 million was
prepaid on June 28, 2004.</p>

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

<p style='line-height:normal;page-break-after:auto' style="margin-top:0;margin-bottom:0">Debt Covenants</p>

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

<p style="margin-top:0;margin-bottom:0">Our debt instruments contain
restrictive covenants, including covenants that could prohibit us from paying
dividends on common stock under certain circumstances, 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.  We have maintained compliance with all of our maintenance financial
ratios as required under our loan covenants 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.  The terms of some of our debt instruments have no minimum
amount for cross-default.  In addition, we are required to comply with certain
financial ratios for the incurrence of capital expenditures in excess of US$10
million and incurrence of 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">In
particular, under our JP&yen;9.760B loan agreement with JBIC, we are required to
obtain prior written consent of JBIC for capital expenditures in excess of
US$10 million, unless, among other things, our current ratio, calculated on a
non-consolidated basis and after taking into account such expenditures, will
not be less than 0.90:1.  As at March 31, 2006, our current ratio as calculated
under our debt covenants on a non-consolidated basis, was 1.51:1.  We currently
believe that our current ratio is unlikely to be less than 0.90:1 due to a
smaller current portion of our long-term debt going forward.  As a result, we
believe that our financial ratios currently do not materially limit our ability
to incur our budgeted capital expenditures or to obtain additional financings.</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">The
principal factors that can negatively affect our ability to comply with the
financial ratios and other financial tests under our debt instruments are
depreciation of the Philippine peso relative to the U.S. dollar, poor operating
performance of PLDT and our 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 expenses 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 Philippine 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 98% of our total consolidated debts were 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.  The peso has
been subject to significant fluctuations in recent years.  From 2002 to 2004,
the peso has generally been depreciating from a high of Php49.336 on May 20, 2002 to a low of Php56.443 on October 14, 2004.  In 2005, the peso fluctuated
significantly from a low of Php56.321 on July 8 to a high of Php53.062 on
December 29.  As at December 31, 2005, the peso had appreciated by 5.8% to
Php53.062 to US$1.00, from Php56.341 to US$1.00 as at December 31, 2004.</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&#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, which is predominantly conducted by PLDT.  PLDT cannot be
assured of the benefit of net revenues and cash flows generated by Smart and
PLDT&#146;s other investees in assisting PLDT 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='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 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: (a) incurring additional indebtedness; (b)
prepaying other debt; (c) making investments; (d) extending loans; (e)
extending guarantees or assuming the obligations of other persons; (f) paying
dividends or other distributions or redeeming, repurchasing or otherwise
acquiring shares of PLDT&#146;s capital stock; (g) disposing of all or substantially
all of its assets or of assets in excess of specified thresholds of its
tangible net worth; (h) entering into management contracts providing for the
management of its business or operations by a third party; (i) creating any
lien or security interest; (j) permitting set-off against amounts owed to PLDT;
(k) merging or consolidating with any other company; <br>
(l) entering into transactions with stockholders and affiliates; and (m)
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">Further,
certain of PLDT&#146;s debt instruments contain provisions wherein PLDT may be
required to repurchase or prepay certain indebtedness in case of change in
control of PLDT or if the ownership of our shares of common stock held by NTT
Communications falls below a certain threshold.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Moreover,
certain of PLDT&#146;s debt instruments restrict PLDT from declaring or distributing
dividends to common stockholders.  In particular, under certain 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 0.90:1 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='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
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&#146; and First Pacific&#146;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&#146;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 <br>
(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&#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, <br>
(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&#146;s GSM network capacity to extend PLDT&#146;s cellular
business in Smart would not be reduced below its level of participation as at
the date of the loan agreement.</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&#146;s debt instruments also contain customary and
other default provisions that permit the lender to accelerate amounts due or
terminate their commitments to extend additional funds under the debt
instruments. These default provisions include: (a) 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; (b) failure by PLDT to
meet certain financial ratio covenants referred to above; (c) 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; (d) the revocation, termination or amendment of any
of the permits or franchises of PLDT in any manner unacceptable to the lender;
(e) the abandonment, termination or amendment of the project financed by a loan
in a manner unacceptable to the lender; (f) the nationalization or sustained
discontinuance of all or a substantial portion of PLDT&#146;s business; and (g)
other typical events of default, including the commencement of bankruptcy,
insolvency, liquidation or winding up proceedings by PLDT.</p>

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

<p style="margin-top:0;margin-bottom:0">Smart&#146;s debt instruments contain
certain restrictive covenants, including covenants that prohibit Smart from
paying dividends, redeeming preferred stock, making distributions to PLDT or
otherwise providing funds to PLDT or any affiliate without the consent of its
lenders under its Phases 1, 2 and 3 facilities.  Also, Smart&#146;s debt instruments
contain certain restrictive covenants that require Smart to comply with specified
financial ratios and other financial tests 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: (a) 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; (b) failure by Smart to comply with certain
financial ratio covenants; (c) any reduction in PLDT&#146;s ownership of Smart&#146;s
shares below 51%; (d) 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; and (e) 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.</p>

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

<p style="margin-top:0;margin-bottom:0">As at December 31, 2005, Piltel
was 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).  Piltel may not be able to restructure or otherwise pay the
claims of its unrestructured debt.  However, default on and acceleration of
Piltel&#146;s unrestructured indebtedness does not create a cross-default under
Piltel&#146;s restructured indebtedness or any indebtedness of PLDT or Smart.</p>

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

<p style="margin-top:0;margin-bottom:0">The Credit and Omnibus Agreements
of Mabuhay Satellite imposes several negative covenants.  In particular, these
covenants, among other things, 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='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">ePLDT&#146;s loan agreement imposes
negative covenants which, among other things, restrict ePLDT in regard to
payment of cash dividends or any other income or any capital distribution to
PLDT, 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 shares pledged.  One of ePLDT&#146;s loan agreements also
requires ePLDT to comply with specified financial ratios and other financial
tests at quarterly measurement dates.  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 at December 31, 2005, ePLDT was in compliance with all of its
financial covenants.</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>Obligations Under Capital Lease</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">The
future minimum payments for capitalized leases are as follows as at December
31, 2005:</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:100.52%;margin-left:.4pt;border-collapse:collapse'>

 <tr style='page-break-inside:avoid;height:3.95pt'>
 <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:3.95pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 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;height:3.95pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 million 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">2006</p>
 </td>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:36.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">895</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">2007</p>
 </td>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:36.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">341</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">2008</p>
 </td>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:36.3pt;text-align:right;
 page-break-after:avoid' 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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2009</p>
 </td>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:36.3pt;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=bottom style=' background:#E0E0E0;
 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">2010</p>
 </td>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:36.3pt;text-align:right;
 page-break-after:avoid' 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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2011 and
 onwards</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:36.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">435</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:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total minimum lease
 payments</p>
 </td>
 <td   style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:36.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,700</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 amount representing interest</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:36.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">603</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">Present value of net minimum lease payments</p>
 </td>
 <td   style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:36.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,097</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 capital lease maturing within one year (Note 7)</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:36.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">716</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom 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">Long-term portion of obligations under capital lease</p>
 </td>
 <td   style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:36.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">381</p>
 </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"><i>Municipal Telephone Projects</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">In
1993, PLDT entered into two lease agreements with the Philippine Department of Transportation and
Communications, or DOTC, covering telecommunications facilities in the province of Bohol and Batangas established under the Municipal Telephone Act.  Under
these agreements, PLDT was granted the exclusive right to provide
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 at December 31, 2005, PLDT&#146;s aggregate remaining
obligation under this agreement was approximately Php858 million.  In case of
cancellation, PLDT is liable to pay Php100 million under each of the two
contracts as liquidated damages.</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 June 1, 2004, PLDT served the
DOTC a notice of termination of the lease agreement in respect of the
telecommunications system in Bohol which state of deterioration, obsolescence
and disrepair has made it impossible for PLDT to continue managing, operating,
and maintaining the system.  Since 2002, PLDT has been advising the DOTC of the
need to review the viability of the system as it has infused more than Php200
million for upgrades and maintenance to keep the system operable.  Further, the
enactment of Public Telecommunications Policy Act, or R.A. No. 7925, which
negated the DOTC&#146;s warranty to grant PLDT the exclusive right to provide
telecommunication services in the areas stipulated, prevented PLDT from
achieving the originally projected profitability, thereby rendering it
impossible for PLDT to continue fulfilling its obligation under the lease
agreement.  Although several discussions have been held since then, no mutually
acceptable agreement has been reached.  On June 30, 2004, the DOTC advised PLDT
that the request for termination of the lease agreement in Bohol has been
referred to the Department of Justice, or DOJ, as government agencies are
required to refer all interpretation of contracts and agreements to the DOJ
secretary as attorney-general of the national government.  On May 5, 2005, PLDT
received a letter from the DOTC stating that PLDT is in default for failure to
remit to the DOTC the quarterly installments under the lease agreement.  Due to
the failure of the parties to amicably settle their dispute, on September 28,
2005, PLDT demanded that the dispute be referred to arbitration and that the
parties agree on the composition of the arbitration committee.  PLDT has not
received any response from the DOTC.  As at December 31, 2005, the net book
value of the telecommunications system in Bohol, including PLDT&#146;s additional
capital expenditure relating to the telecommunications system, and
corresponding capital lease obligation amounted to Php28 million and Php735
million, respectively.</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>Other Long-term Capital
Lease Obligations</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 PLDT Group has various long-term lease contracts
for a period of three years covering various office equipment.  In particular,
Smart and Piltel have capital lease obligations aggregating Php818 million as
at December 31, 2005 in respect of office equipment and facilities.</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 terms of certain loan agreements and other debt instruments, PLDT may not
create, incur, assume or 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='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b>Notes Payable</b></p>

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

<p 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 11.75% at December 31,
2004 for Philippine peso borrowings, and 2.78% at December 31, 2004 for U.S.
dollar borrowings.  The loan facility was fully paid in 2005.</p>

<p 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='page-break-after:avoid;punctuation-wrap:hanging;
text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>13.    Deferred Credits and Other Noncurrent
Liabilities</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:100.68%;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-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'>
 <p align=right style='margin-top:0in;margin-right:7.75pt;
 margin-bottom:0in;margin-left:.05pt;margin-bottom:.0001pt;text-align:right;
 text-indent:-.05pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;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-top:0in;margin-right:7.7pt;
 margin-bottom:0in;margin-left:4.65pt;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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">Accrual of capital expenditures under
 long-term financing </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>5,769</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">3,970</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">Advance payment under a receivables
 purchase facility (Note 5)</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>976</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">1,644</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Liabilities on asset retirement
 obligations (Note 3)</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>752</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">638</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</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>924</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">736</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>8,421</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">6,988</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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>14.    Preferred Stock Subject
to Mandatory Redemption</b></p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As
at December 31, 2005, PLDT had issued 3 million shares of Series V Convertible
Preferred Stock, <br>
5 million shares of Series VI Convertible Preferred Stock and 4 million shares
of Series VII Convertible Preferred Stock in exchange for Series K Class I
Convertible Preferred Stock of Piltel, pursuant to the debt restructuring plan
of Piltel adopted in June 2001.  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.  Each share of
Series V, VI and VII Convertible Preferred Stock is convertible at any time at
the option of the holder into one PLDT 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 into PLDT common shares.
Under a put option exercisable for 30 days, holders of common shares received
on mandatory conversion of the Series V, VI and VII Convertible Preferred Stock
will be able to require PLDT to purchase such PLDT common shares for Php1,700
per share, US$36.132 per share, and JP&yen;4,071.89 per share, 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
23</i> &#150; <i>Financial Assets and Liabilities</i>.  The aggregate fair value of
the issued Series V, VI and VII Convertible Preferred Stock as at date of
issuance &#150; net of the bifurcated option values &#150; is shown 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">As at 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 presented as part of &#147;Remaining excess of debt forgiven
over value of consideration given&#148; account 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 remaining excess
of debt forgiven over the value of consideration given.  Total interest
incurred related to the restructured debt for the years ended December 31,
2005, 2004 and 2003 amounted to Php365 million, Php473 million and Php688
million, respectively.  As at December 31, 2005 and 2004, the remaining excess
of debt forgiven over the value of consideration given balance amounted to
Php2,015 million and Php2,380 million, respectively, after giving effect to the
above interest expense, cancellation of Piltel debt through Smart acquisition
from Piltel&#146;s creditors of the 69.4% of outstanding restructured Piltel debt,
see <br>
<i>Note 12 &#150; Interest-bearing Financial Liabilities,</i> and the additional
issuances in 2004 and 2003 of convertible preferred shares to restructure
Piltel&#146;s debt.</p>

<p 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 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, 2005 and 2004 amounted to Php1,443 million and Php1,503
million, respectively.  Unaccreted balance as at December 31, 2005 and 2004
amounted to Php3,886 million and Php7,060 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">&#147;Preferred
Stock Subject to Mandatory Redemption&#148; amounted to Php12,004 million and Php14,956
million as at December 31, 2005 and 2004, respectively, after revaluation of
Series VI and VII Convertible Preferred Stock to the exchange rates at balance
sheet dates and after giving effect to the above accretions, conversions and
additional issuances.  As at December 31, 2005 and 2004, 3,376,743 shares and
1,060,940 shares, respectively, of the Convertible Preferred Stock have been
converted into PLDT common shares.  The outstanding shares of Series V, VI and
VII Convertible Preferred Stock as at December 31, 2005 were 240,887, 4,398,914
and 3,842,000, respectively.  The aggregate redemption value of the outstanding
Series V, VI and VII Convertible Preferred Stock amounted to Php15,890 million
and Php22,016 million as at December 31, 2005 and 2004, respectively.</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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>15.    Stockholders&#146; Equity</b></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
movement of PLDT&#146;s capital account 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:98.68%;margin-left:5.4pt;border-collapse:collapse;width:98.68% !msorm;
 border-collapse:collapse !msorm'>

 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-top:
 double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-top:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=4 valign=bottom style=' border-top:double windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:double 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>Preferred Stock</b> &#150; Php10 par value</p>
 </td>
 <td   colspan=4 valign=bottom style=' border:none;
 border-top:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-top:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='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=bottom style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;page-break-after:auto' 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>Series <br>
 A to EE</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 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"><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;border-top:solid windowtext 1.0pt !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>IV</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;border-top:solid windowtext 1.0pt !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>&nbsp;</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"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom 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>&nbsp;</b></p>
 </td>
 <td   colspan=2 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>Common Stock</b>
 &#150;Php5 par value</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 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;page-break-after:auto' 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 5.4pt 0in 5.4pt;border-top:solid windowtext 1.0pt !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='margin-left:3.55pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>No. of Shares</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"><b>Total Preferred Stock</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"><b>Amount</b></p>
 </td>
 <td   colspan=2 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>No. of Shares</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"><b>Amount</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"><b>&nbsp;</b></p>
 </td>
 <td   colspan=8 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">(in million shares and pesos)</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 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"><b>Authorized</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:.05in;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 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">&nbsp;</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:.05in;text-align:right' 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 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">823</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php8,230</p>
 </td>
 <td   colspan=2 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:.05in;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;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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php1,170</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"><b>Outstanding</b></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:.05in;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 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">&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:.05in;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 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"><b>&nbsp;</b></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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</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:.05in;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:.05in;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:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Balance at January 1, 2003</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">407</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">5</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;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">36</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">448</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">Php4,474</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 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">169</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">Php847</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">Issuance</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">5</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">&#150;</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">&#150;</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">5</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">52</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#E0E0E0;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">Conversion</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">(2)</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:.05in;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 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>
 <td   valign=bottom style=' background:#E0E0E0;
 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">(2)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">(21)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 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">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">&#150;</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 1.5pt;border-right:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Balance at December 31, 2003</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:#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"> 410</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:#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">   5</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:#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">  36</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:#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"> 451</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:#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">Php4,505</p>
 </td>
 <td   colspan=2 valign=bottom 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"> 169</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:#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">Php847</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-left:4.5pt;text-indent:-4.5pt' 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:.05in;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;
 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">&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:.05in;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;
 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">&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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 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:.05in;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;
 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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <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">Balance at January 1, 2004</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"> 410</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">   5</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">  36</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"> 451</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">Php4,505</p>
 </td>
 <td   colspan=2 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"> 169</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php847</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">Issuance</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">1</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">&#150;</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">&#150;</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">   1</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">9</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">&#150;</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">2</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 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">Conversion</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='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 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">&#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=right style='margin-right:.05in;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=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:#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='text-align:right' style="margin-top:0;margin-bottom:0">(17)</p>
 </td>
 <td   colspan=2 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:.05in;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 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">2</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">Balance at December 31, 2004</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"> 409</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">   5</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">  36</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"> 450</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">Php4,497</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"> 170</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">Php851</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-left:4.5pt;text-indent:-4.5pt' 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:.05in;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;
 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">&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:.05in;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;
 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">&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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 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:.05in;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;
 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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <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">Balance at January 1, 2005</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"> 409</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">   5</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">  36</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"> 450</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">Php4,497</p>
 </td>
 <td   colspan=2 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"> 170</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">Php851</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">Issuance</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">&#150;</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">&#150;</p>
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 <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">&#150;</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">&#150;</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">3</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">1</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">2</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 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">Conversion</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='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 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">(5)</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:.05in;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=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:#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='text-align:right' style="margin-top:0;margin-bottom:0">(67)</p>
 </td>
 <td   colspan=2 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">10</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">51</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"><b>Balance at December 31,
 2005</b></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"><b> 407</b></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"><b>&#150;</b></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"><b>  36</b></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"><b> 443</b></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"><b>Php4,433</b></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"><b> 181</b></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"><b>Php904</b></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='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Preferred Stock</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
preferred stock is non-voting, except as specifically provided by law, and is
preferred as to liquidation.</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
Series A to FF 10% Cumulative Convertible Preferred Stocks earn cumulative
dividends at an annual rate of 10%.  After the lapse of one (1) year from the
last day of the year of issuance of a particular series of 10% Cumulative
Convertible Preferred Stock, any holder of such series may convert all or any of
the shares of 10% Cumulative Convertible Preferred Stock held by him into fully
paid and non-assessable shares of Common Stock of PLDT, at a conversion price
equivalent to 10% below the average of the high and low daily sales price of a
share of Common Stock on the PSE, or if there shall have been no such sales on
the PSE on any day, the average of the bid and the asked prices of a share of
Common Stock of PLDT at the end of such day on such Exchange, in each such case
averaged over a period of 30 consecutive trading days prior to the conversion
date, but in no case shall the conversion price be less than the price set by
the Board of Directors which, as at December 31, 2005, was Php5.00 per share.
The number of shares of Common Stock issuable at any time upon conversion of
one share of subscriber investment plan, or SIP.  Cumulative Convertible
Preferred Stock shall be determined by dividing Php10.00 by the then applicable
conversion price.</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 case the shares of Common Stock at anytime
outstanding shall be subdivided into a greater or consolidated into a lesser
number of shares, then the minimum conversion price per share of Common Stock
shall be proportionately decreased or increased, as the case may be, and in the
case of a stock dividend, such price shall be proportionately decreased,
provided, however, that in every case the minimum conversion price shall not be
less than the par value per share of Common Stock.  In the event the relevant
effective date for any such subdivision or consolidation of shares or stock
dividend occurs during the period of 30 trading days preceding the presentation
of any shares of 10% Cumulative Convertible Preferred Stock for conversion, a
similar adjustment shall be made in the sales prices applicable to the trading
days prior to such effective date utilized in calculating the conversion price
of the shares presented for conversion.</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
case of any other reclassification or change of outstanding shares of Common
Stock, or in case of any consolidation or merger of PLDT with or into another
corporation, the Board of Directors shall make such provisions, if any, for
adjustment of the minimum conversion price and the sales price utilized in
calculating the conversion price as the Board of Directors, in it sole
discretion, shall be deemed appropriate.</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">At
PLDT&#146;s option, the Series A to FF 10% Cumulative Convertible Preferred Stocks
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 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, which is an exempt transaction under Section 10.2 of
the SRC as confirmed by Philippine SEC on March 22, 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
December 9, 2004, the Board of Directors designated 500,000 shares of serial
preferred stock as Series FF 10% Cumulative Convertible Preferred Stock for
issuance throughout 2005.  Confirmation of exemption of these transactions
under Section 10.2 of the SRC is still pending with the Philippine SEC.</p>

<p style='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 6, 2005, the Board of Directors designated 100,000 shares of serial
preferred stock as Series GG 10% Cumulative Convertible Preferred Stock for
issuance throughout 2006.  Confirmation of exemption of this transaction under
Section 10.2 of the SRC is still pending with the Philippine SEC.</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">On
October 24, 2005, PLDT issued to JPMorgan, as depositary, and to the holders of
the Series III Convertible Preferred Stock a notice of mandatory conversion of
all of its outstanding 4,616,200 Series III Convertible Preferred Stock into
shares of PLDT common stock, with each share of Series III Convertible
Preferred Stock convertible to 1.7129 shares of Common Stock.  The Series III
Convertible Preferred Stock had been issued in 1994 in connection with a Global
Depositary Receipt, or GDR, facility, pursuant to which GDRs evidencing Global
Depositary Shares, or GDS, were issued, with each GDS representing one share of
Series III Convertible Preferred Stock of PLDT.  As of the date of the issuance
of the notice of mandatory conversion, the conditions for mandatory conversion
under the terms of the Series III Preferred Stock had been satisfied,
including: (i) that the average closing price of PLDT&#146;s ADSs for the 30-day
period ending seven days prior to the date in which notice of the mandatory
conversion was given was above US$29.19, (ii) that there were no dividends in
arrears on any shares of the Series III Convertible Preferred Stock, and (iii)
that PLDT had sufficient distributable reserves to pay the fixed preferential
dividends on the shares of Series III Convertible Preferred Stock, calculated
down to and including the mandatory conversion date.</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
November 2005, PLDT issued 710,891 shares of PLDT common stock on account of
the voluntary conversion of 415,023 shares of Series III Convertible Preferred
Stock.</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 December
19, 2005, the mandatory conversion date, all of the 4,616,200 outstanding
shares of PLDT&#146;s Series III Convertible Preferred Stock were mandatorily
converted into shares of PLDT common stock.  A total of 7,907,032 shares of
PLDT&#146;s common stock were issued as a result of the voluntary and mandatory
conversions of all the Series III Convertible Preferred Stock.</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 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='margin-left:.25in' 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
shares of preferred stock, except shares of Series V, VI and VII PLDT
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' 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 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' 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='page-break-after:avoid;punctuation-wrap:hanging;
text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>16.    Related Party Transactions</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
following is a summary of related party accounts with affiliates presented as
part of our consolidated balance sheets as of December 31, 2005 and 2004 and
consolidated statements of income for the years ended December 31, 2005, 2004,
and 2003:</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='height:10.2pt'>
 <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:10.2pt'>
 <p style='margin-bottom: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-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:10.2pt'>
 <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=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:10.2pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:10.2pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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=3 valign=top style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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">Consolidated Balance Sheets</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">&nbsp;</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><i>&nbsp;</i></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"><b><i>&nbsp;</i></b></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;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrued expenses and other current
 liabilities</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-left: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=' border:none;border-bottom:
 solid windowtext 1.0pt;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"><b>1,156</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,270</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>

<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='text-align:justify' 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:.05in;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2004</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;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   colspan=3 valign=top style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:37.8pt;text-align:right' style="margin-top:0;margin-bottom:0">(in million pesos)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">Consolidated
 Statements of Income</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-left:9.0pt;text-align:right' 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='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='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:9.0pt;text-align:justify' style="margin-top:0;margin-bottom:0">Cost of satellite air time</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"><b>1,008</b></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">1,299</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">1,919</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify' style="margin-top:0;margin-bottom:0">Repairs and maintenance expenses</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-top:0in;margin-right:.05in;
 margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>640</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">111</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">68</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify' style="margin-top:0;margin-bottom:0">Insurance and security services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-top:0in;margin-right:.05in;
 margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>467</b></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">534</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">581</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify' style="margin-top:0;margin-bottom:0">Professional and other contracted services</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-top:0in;margin-right:.05in;
 margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>147</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">694</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">616</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify' 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-top:0in;margin-right:.05in;
 margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>29</b></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">32</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">26</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:9.0pt;text-align:justify' style="margin-top:0;margin-bottom:0">Rent</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-top:0in;margin-right:.05in;
 margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>8</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">6</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:.05in;text-align:right' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:40.5pt;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>a.   Air Time Purchase Agreement
between PLDT and AIL and Related Agreements</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">In March 1997, PLDT entered into a National Service
Provider, or Founder NSP, Air Time Purchase Agreement with PT Asia Cellular
Satellite, as amended in December 1998 and as assigned and transferred to AIL,
under which PLDT was granted the exclusive right to sell ACeS services in the Philippines.  In exchange, the Air Time Purchase Agreement required PLDT to purchase from
PT Asia Cellular Satellite at least US$5 million worth of air time annually
over ten years, commencing on January 1, 2002, the date of commercial
operations.</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='text-indent:.5in;page-break-after:avoid' 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;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.  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.  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 would cover,
among other things, 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 ongoing negotiations, AIL
advised PLDT of the termination of the Standstill Agreement and the reinstatement
of the terms under the original Air Time Purchase Agreement effective January
1, 2002, following the lapse of the November 15, 2003 deadline set in the
Standstill Agreement for the negotiation of a revised Air Time Purchase
Agreement.  Negotiations are continuing with the relevant parties towards an
amicable settlement of this matter.</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">As at December 31, 2005 and 2004, PLDT&#146;s outstanding
payables under the original Air Time Purchase Agreement was Php3,493 million
and Php2,728 million, respectively.  Total fees under this agreement amounted
to Php1,008 million, Php1,299 million and Php1,919 million for the years ended December 31, 2005, 2004 and 2003,
respectively.  See <i>Note 21 &#150; Contractual Obligations and Commercial
Commitments</i> and <i>Note 22 &#150; Provisions and Contingencies </i>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">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' 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;
authorize distributors to resell
ACeS services in the Philippines upon prior approval from <br>
PT Asia Cellular Satellite; 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;
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 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">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Under an Acknowledgment of the 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 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
banks.</p>

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

<p style='text-indent:.5in' 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 30, 2012.</p>

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

<p style='margin-left:.5in;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>b.   Transactions with </i><i>Major</i><i>
Stockholders, Directors and Officers </i></p>

<p style='margin-left:.25in' 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">Transactions to which PLDT or any of its subsidiaries
are a party, in which a director or key officer or owner of more than 10% of
the outstanding common stock of PLDT, or any member of the immediate family of
a director or key officer or owner of more than 10% of the outstanding common
stock of PLDT had a direct or indirect material interest, as at December 31,
2005 and 2004 and for the three years ended December 31, 2005, 2004 and 2003
are as follows:</p>

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

<p style='margin-left:.5in;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>1.   </i><i>Cooperation</i><i>
Agreement with the FP Parties, NTT Communications and DoCoMo  </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 the transfer by NTT Communications
of approximately 12.6 million shares of PLDT&#146;s common stock to DoCoMo pursuant
to the Stock Sale and Purchase Agreement dated January 31, 2006 between NTT
Communications and DoCoMo, the FP Parties, NTT Communications and DoCoMo
entered into a Cooperation Agreement, dated January 31, 2006.  Under the
Cooperation Agreement, the relevant parties extended certain rights of NTT
Communications thereunder to DoCoMo, including:</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;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;
certain contractual veto rights
over a number of major decisions or transactions; and</p>

<p style='margin-left:.25in' 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;
rights relating to the
representation on the board of directors of PLDT and Smart, respectively, and
any committees thereof.</p>

<p 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">Moreover, key provisions of the Cooperation Agreement
pertain to, among other things:</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;
<i>Restriction on Ownership of
Shares of PLDT by NTT Communications and DoCoMo. </i> Each of NTT Communications and DoCoMo have agreed not
to beneficially own, directly or indirectly, in the aggregate with their
respective subsidiaries and affiliates, more than 21% of then issued and
outstanding shares of PLDT&#146;s common stock.  If such event does occur, the FP
Parties, as long as they own in the aggregate not less than 21% of then issued
and outstanding shares of PLDT&#146;s common stock, have the right to terminate
their respective rights and obligations under the Cooperation Agreement, the
Shareholders Agreement and the Stock
Purchase and Strategic Investment Agreement.</p>

<p style='margin-left:.25in' 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>Limitation on Competition.</i>  NTT Communications, DoCoMo and their respective
subsidiaries are prohibited from investing in excess of certain thresholds in
businesses competing with PLDT in respect of customers principally located in
the Philippines and from using their assets in the Philippines in such
businesses. Moreover, if PLDT, Smart or any of Smart&#146;s subsidiaries
intends to enter into any contractual arrangement relating to certain competing
businesses, PLDT is required to provide, or to use reasonable efforts to
procure that Smart or any of Smart&#146;s subsidiaries provide NTT Communications and
DoCoMo with the same opportunity to enter into such agreement with PLDT or
Smart or Smart&#146;s subsidiaries, as the case may be.  </p>

<p style='margin-left:.25in' 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>Business Cooperation.</i>  PLDT and DoCoMo agreed in principle to collaborate
with each other on the business development, roll-out and use of a W-CDMA
mobile communication network.  In addition, PLDT agreed, to the extent of the
power conferred by its direct or indirect shareholding in Smart, to procure that Smart will (i) become a
member of a strategic alliance group for international roaming and corporate
sales and services and (ii) enter into a business relationship concerning
preferred roaming and inter-operator tariff discount with DoCoMo.</p>

<p style='margin-left:.25in' 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>Additional Rights of DoCoMo. </i> Upon NTT Communications, DoCoMo and their
subsidiaries owning in the aggregate 20% or more of the shares of PLDT&#146;s common
stock and for as long as NTT Communications, DoCoMo and their subsidiaries
continue to own in the aggregate 17.5% of the shares of PLDT&#146;s common stock
then outstanding, DoCoMo will be entitled to certain additional rights under
the Cooperation Agreement.</p>

<p style='margin-left:.25in' 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>Change in Control.</i>  Each of NTT
Communications, DoCoMo and the FP Parties agreed that to the extent permissible
under applicable laws and regulations of the Philippines and other
jurisdictions, subject to certain conditions, to cast its vote as a shareholder
in support of any resolution proposed by the board of directors of PLDT for the
purpose of safeguarding PLDT from any Hostile Transferee.  A &#147;Hostile
Transferee&#148; is defined under the Cooperation Agreement to mean any person
(other than NTTC, DoCoMo, First Pacific or any of their respective affiliates)
determined to be so by the PLDT board of directors and includes, without
limitation, a person who announces an intention to acquire, seeking to acquire
or acquires 30% or more of PLDT common shares then issued and outstanding from
time-to-time or having (by itself or together with itself) acquired 30% or more
of the PLDT common shares announces an intention to acquire, seeking to acquire
or acquires a further 2% of such PLDT common shares (a) at a price per share
which is less than the fair market value as determined by the board of
directors of PLDT as advised by a professional financial advisor, (b) which is
subject to conditions which are subjective or which could not reasonably be
satisfied, (c) without making an offer for all PLDT common shares not held by
it and/or its affiliates and/or persons who, pursuant to an agreement or
understanding (whether formal or informal), actively cooperate to obtain or
consolidate control over PLDT, (d) whose offer for the PLDT common shares is
unlikely to succeed or (e) whose intention is otherwise not bona fide; provided
that, no person will be deemed a Hostile Transferee unless prior to making such
determination, the board of directors of PLDT has used reasonable efforts to
discuss with NTT Communications and DoCoMo in good faith whether such person
should be considered a Hostile Transferee.</p>

<p style='margin-left:.25in' 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>Termination.</i>  If NTT Communications, DoCoMo or their respective subsidiaries
cease to own, in the aggregate, full legal and beneficial title to at least 10%
of the shares of PLDT&#146;s common stock then issued and outstanding, their
respective rights and obligations under the Cooperation Agreement and the
Shareholders Agreement will terminate and the Strategic Arrangements (as
defined in the Stock Purchase and Strategic Investment Agreement) will
terminate.  If the FP Parties and their respective subsidiaries cease to have,
directly or indirectly, effective voting power in respect of shares of PLDT&#146;s
common stock representing at least 18.5% of the shares of PLDT&#146;s common stock
then issued and outstanding, their respective rights and obligations under the
Cooperation Agreement, the Stock Purchase and Strategic Investment Agreement,
and the Shareholders Agreement will terminate.</p>

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

<p style='margin-left:.5in;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>2.   Integrated i-</i><i>mode</i><i>
Services Package Agreement between DoCoMo and Smart</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
Integrated i-mode Service Package Agreement was entered into by Smart and
DoCoMo on February 15, 2006, under which DoCoMo agreed to grant Smart, on an
exclusive basis within the territory of the Philippines for a period of five
years, an integrated i-mode service package including non-transferable license
to use the licensed materials and the i-mode brand, as well as implementation
support and assistance and post-commercial launch support from DoCoMo. Pursuant
to this agreement, Smart is required to pay an initial license fee and running
royalty fees based on the revenue arising from i-mode subscription fees and
data traffic.</p>

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

<p style='margin-left:.5in;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>3.   </i><i>Other</i><i> Agreements
with NTT Communications and/or its Affiliates</i></p>

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

<p 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='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>Advisory Services Agreement</i>.   On March 24, 2000, PLDT entered into an agreement
with NTT Communications, as amended on March 31, 2003 and March 31, 2005, under
which NTT Communications provides PLDT with technical, marketing and other
consulting services for various business areas of PLDT starting April 1, 2000.
Under the Cooperation Agreement, PLDT agreed to use reasonable efforts to
procure that, with respect to the Advisory Services Agreement, PLDT and Smart,
will receive at a minimum the specified aggregate number of advisors entitled
to be provided by NTT Communications and DoCoMo in accordance with the
timetable set out in the Cooperation Agreement;</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;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:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:54.4pt;text-indent:-18.4pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total
fees under these agreements amounted to Php256 million, Php336 million and
Php289 million for the years ended December 31, 2005, 2004 and 2003,
respectively.  As at December 31, 2005 and 2004, outstanding obligations of
PLDT amounted to Php23 million and Php49 million, respectively.</p>

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

<p style='margin-left:.5in;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>4.   Agreement between Smart and Asia Link B.V., or ALBV </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">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 cellular business 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 2004, the agreement was amended, reducing the
technical service fees to be paid by Smart to ALBV to 1% of net revenues
effective January 1, 2004.  On February 18, 2004, Smart and ALBV entered into a
renewal of the technical service agreement extending the effectivity of the
terms of the agreement to February 23, 2008.  Furthermore, in view of the
acquisition by Smart of Piltel Series K Class I Convertible Preferred Stock
held by PLDT, the parties agreed to make the consolidated net revenues of Smart
the basis for the computation of the 1% royalty payable by Smart to ALBV,
effective from January 1, 2005.  </p>

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

<p style='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.
Service agreement fees were paid for the whole 25-year period.</p>

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

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">ALBV
is a subsidiary of the First Pacific Group.</p>

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

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total
fees under these agreements amounted to Php567 million, Php507 million and
Php429 million for the years ended December 31, 2005, 2004 and 2003,
respectively.  Outstanding obligations of Smart under the Technical Service
Agreement amounted to Php194 million and Php267 million as at December 31, 2005
and 2004, respectively.</p>

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

<p style='margin-left:.5in;text-indent:-13.5pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>5.   Agreements relating to insurance
companies</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">Gotuaco del Rosario and Associates, or Gotuaco, acts
as the broker for certain insurance companies to cover certain properties of
the PLDT Group.  Insurance premiums are remitted to Gotuaco and the broker&#146;s
fees are settled between Gotuaco and the insurance companies.  In addition,
PLDT has an insurance policy with Malayan Insurance Co., Inc., or Malayan,
wherein premiums are directly paid to Malayan.  Total insurance expenses under
these agreements amounted to Php468 million, Php488 million and Php565 million
for the years ended December 31, 2005, 2004 and 2003, respectively.  Two
directors of PLDT have a direct/indirect interests in or serve as a
director/officer of Gotuaco and Malayan.</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>

<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='page-break-after:avoid;punctuation-wrap:hanging;
text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>17.    Employee Benefits</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"><b><i>Share-Based Payment</i></b></p>

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

<p style='margin-left:.2in;text-indent:21.05pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>Executive Stock Option Plan, or ESOP</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">Stock options granted under the ESOP 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 ESOP 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 ESOP shall vest, 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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The number of shares reserved under the ESOP should
not exceed 1.2% of the total issued common shares of PLDT, and the number of
shares reserved for issuance under the ESOP is increased to include any shares
of PLDT&#146;s common stock issuable upon exercise of options granted under the ESOP
that expire or lapse for any reason without having been exercised in full. </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
ESOP 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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">On
December 10, 1999, PLDT granted 1,289,745 options to purchase shares of PLDT&#146;s
common stock under the ESOP.  Stock option activity under the ESOP for the
years ended December 31, 2005, 2004 and 2003 is summarized below:</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:472.5pt;border-collapse:collapse'>
 <tr style='height:9.3pt'>
 <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:9.3pt'>
 <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 0in 0in 0in;height:9.3pt'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Weighted Average
 Exercise Price Per Share</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:9.3pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:9.3pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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:9.3pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 </tr>
 <tr>
 <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">Balance at beginning of year</p>
 </td>
 <td  valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.5in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php814</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>536,589</b></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">900,118</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">1,226,395</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">Exercised shares</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.5in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">814</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin:0in;margin-bottom:.0001pt;
 text-align:right;line-height:normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(335,605)</b></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">(336,745)</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">&#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">Cancelled</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:.5in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">814</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>(3,484)</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:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(26,784)</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:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(326,277)</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='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 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.5in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php814</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>197,500</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">536,589</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">900,118</p>
 </td>
 </tr>
</table></center></div>

<p align=right style='text-align:right;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
the above grants under the ESOP were made to executives of PLDT and all
outstanding stock options became fully vested in December 2004.</p>

<p align=right style='text-align:right;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, 2005 and 2004 were 197,500 shares
and 536,589 shares, respectively.</p>

<p align=right style='text-align:right;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">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 ESOP 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 five years
as at December 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"><i>LTIP</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 August 3, 2004, PLDT&#146;s Board of Directors approved the establishment
of the LTIP for eligible key executives, officers and advisors of PLDT and its
subsidiaries, which is administered by the Executive Compensation Committee.
The LTIP is a four-year cash plan covering the period from January 1, 2004 to
December 31, 2007.  The LTIP awards payment at the end of the four-year period
(without interim payments) is contingent upon the achievement of an approved
target increase in PLDT&#146;s common share price by the end of the plan period and
a cumulative consolidated net income target for the plan period.  The target
increase in the PLDT base share price, which is the average of the closing
prices of PLDT shares ten trading days before or after December 31, 2003, is
approximately 15% per annum compounded for the plan period.</p>

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

<p style="margin-top:0;margin-bottom:0">The compensation cost from LTIP
was measured using the variable accounting method under APB Opinion No. 25
since the plan is a variable plan.  The accounting for variable plans requires
that an estimate of compensation expense be recognized and updated at each
accounting period until the measurement date.  The final measurement of
compensation expense is not determinable until both the number of shares and
the exercise price per share are known.  The LTIP cost, including cost for
advisors (presented under professional and other service fees in the statements
of income), recognized as an expense for the year ended December 31, 2005 and
2004 amounted to Php1,224 million and Php378 million, respectively.</p>

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

<p style='margin-left:.5in;text-indent:0in' style="margin-top:0;margin-bottom:0">Movements in the number of outstanding LTIP awards 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:100.96%;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:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</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:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' 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:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,685,959</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.05pt;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:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Awards</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>493,429</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0">3,685,959</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:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Cancellations/forfeitures</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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(294,982)</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:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</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:0in;margin-bottom:.0001pt;line-height:normal' 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:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,884,406</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:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0">3,685,959</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">In
conformity with SFAS 123, the fair value of each award was estimated using
pricing model, which considered annual stock volatility of 34.8%, risk-free
interest rate of 9.086%, remaining life of the award and weighted average share
price Php1,835 as at December 31, 2005.  Incentive cost per award as at
December 31, 2005 and 2004 amounted to Php1,044.01 and Php716.81, respectively.</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>Pension</i></b></p>

<p style='line-height:9.0pt' 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"><i>PLDT</i></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">PLDT has a trustee-managed, non-contributory defined
benefit plan, or Benefit Plan, providing for retirement and death benefits and service terminal pay to
substantially 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 under the Benefit Plan are based on the employee&#146;s final monthly basic
salary and length of service.</p>

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

<p style='text-indent:.5in' 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 at December 31, 2005, 2004 and 2003 based on the latest
actuarial valuation dated February 2006:</p>

<p style='line-height:9.0pt' 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:100.54%;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' 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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-right:5.15pt' 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:5.15pt;text-align:center;
 text-indent:33.8pt' style="margin-top:0;margin-bottom:0">(in million 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="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' 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' 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' 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' 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' style="margin-top:0;margin-bottom:0"><b>6,864</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' style="margin-top:0;margin-bottom:0">5,971</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">7,984</p>
 </td>
 </tr>
 <tr>
 <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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>427</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' style="margin-top:0;margin-bottom:0">382</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">515</p>
 </td>
 </tr>
 <tr>
 <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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>684</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' style="margin-top:0;margin-bottom:0">535</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">716</p>
 </td>
 </tr>
 <tr>
 <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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(495)</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">(18)</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">(17)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' 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=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>121</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' style="margin-top:0;margin-bottom:0">679</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,227)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' 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' 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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">116</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">274</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' 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:5.15pt;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:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(801)</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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,274)</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='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Benefit obligation at end of year</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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>7,601</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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">6,864</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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">5,971</p>
 </td>
 </tr>
 <tr>
 <td   valign=top 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:5.15pt;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:5.15pt;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:5.15pt;text-align:right' 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="margin-top:0;margin-bottom:0">Change in 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' 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' 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' 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' 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' style="margin-top:0;margin-bottom:0"><b>4,448</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' style="margin-top:0;margin-bottom:0">3,927</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">2,915</p>
 </td>
 </tr>
 <tr>
 <td   valign=top 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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>633</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' style="margin-top:0;margin-bottom:0">883</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">2,703</p>
 </td>
 </tr>
 <tr>
 <td   valign=top 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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>568</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' style="margin-top:0;margin-bottom:0">457</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">600</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Settlement</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' 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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(801)</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">(2,274)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;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:#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>(495)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(18)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(17)</p>
 </td>
 </tr>
 <tr>
 <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-top:0;margin-bottom:0">Fair value of plan assets at
 end of year</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='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,154</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='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">4,448</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='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">3,927</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p 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>(2,447)</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">(2,416)</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">(2,044)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p 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' style="margin-top:0;margin-bottom:0"><b>189</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' style="margin-top:0;margin-bottom:0">199</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">229</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:0in;margin-bottom:.0001pt;line-height:normal' 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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>116</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' style="margin-top:0;margin-bottom:0">89</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:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(498)</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="margin-top:0;margin-bottom:0">Accrued benefit cost</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:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(2,142)</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:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,128)</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:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,313)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top 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:5.15pt;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:5.15pt;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:5.15pt;text-align:right' 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="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' 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' 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' 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' 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' style="margin-top:0;margin-bottom:0"><b>427</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' style="margin-top:0;margin-bottom:0">382</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">515</p>
 </td>
 </tr>
 <tr>
 <td   valign=top 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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>684</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' style="margin-top:0;margin-bottom:0">535</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">716</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' 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=' 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>(540)</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">(376)</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">(303)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p 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' 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' 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' 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' 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' 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:5.15pt;text-align:right' 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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">13</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' style="margin-top:0;margin-bottom:0">Unrecognized
 actuarial 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' 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:5.15pt;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'>
 <p align=right style='margin-right:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0">2</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="margin-top:0;margin-bottom:0">Net periodic benefit cost</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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 581</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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"> 551</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:5.15pt;text-align:right' style="margin-top:0;margin-bottom:0"> 943</p>
 </td>
 </tr>
</table></center></div>

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

<p style="margin-top:0;margin-bottom:0">The accumulated benefit
obligations amounted to Php1,946 million, Php2,868 million and Php4,330 million
as at December 31, 2005, 2004 and 2003, 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 at December 31,
2005, 2004 and 2003 are as follows:</p>

<p style='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:100.88%;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>2005</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">2004</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">2003</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 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">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>11%</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">10%</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>
 </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>10%</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">10%</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">9%</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>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:6.3pt;text-align:right;
 page-break-after:avoid' 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 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">6%</p>
 </td>
 </tr>
</table></center></div>

<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">The
allocation of the fair value of plan assets for PLDT follows:</p>

<p 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:100.96%;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:0in;margin-bottom:.0001pt;line-height:normal' 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>2005</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">2004</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">2003</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 and
 fixed income 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>40%</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">41%</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">44%</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>37%</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">33%</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">36%</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 real estate</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>13%</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">16%</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">15%</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 mutual funds</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>6%</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">2%</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">Investments in temporary
 placements</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>4%</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">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:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">3%</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"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As
at December 31, 2005, our plan assets include investments in shares of stock of
PLDT and Piltel with a total fair values aggregating Php1,643 million, which
represent about 29% of our beneficial trust fund&#146;s net assets available for
plan benefits (31% in 2004 and 36% in 2003).</p>

<p 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">Movements of shares of stock of PLDT and Piltel held
by the plan during 2005 are as follows:</p>

<p style='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:100.36%;background:#E0E0E0;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;background:transparent;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-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:transparent;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:6.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>PLDT</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:transparent;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">Piltel</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:transparent;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;background:transparent;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Common 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;
 background:transparent;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">Preferred Shares</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:transparent;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Common Shares</b></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">Numbers of shares held by the plan as at January 1, 2005</p>
 </td>
 <td   valign=bottom style=' border: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">661,643</p>
 </td>
 <td   valign=bottom style=' border: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">36,000,000</p>
 </td>
 <td   valign=bottom style=' border: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">19,958,760</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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">Purchases during the
 year</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">&#150;</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">&#150;</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">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Sales during the year</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:6.3pt;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;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">&#150;</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:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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">Number of shares held by the plan as at December 31, 2005</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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">661,643</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:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">36,000,000</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:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,958,760</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Dividends
received by the plan from PLDT for the years ended December 31, 2005, 2004 and
2003 amounted to Php86 million, Php47 million and Php51 million, respectively.</p>

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

<p style="margin-top:0;margin-bottom:0">PLDT expects to make
approximately Php558 million of cash contributions to its pension plan in 2006.</p>

<p 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">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 style='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>
 <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"><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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million pesos)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">62</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">102</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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">124</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2009</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">145</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">2010</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">211</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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2011 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,781</p>
 </td>
 </tr>
</table></center></div>

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

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

<p style='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">Smart has a trustee-managed, tax-qualified provident
plan, or 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 at the end of the preceding period.</p>

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

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Any
benefit payable under the Provident 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 to 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 Provident Plan or other available
benefits, but not to both.</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">The
allocation of the fair value of plan assets for Smart follows:</p>

<p 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:100.86%;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:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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">2004</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">2003</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;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=' 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>76%</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">78%</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">86%</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:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>23%</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">20%</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">12%</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:4.55pt;text-align:right;
 page-break-after:avoid' 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:#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">2%</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:4.55pt;text-align:right;
 page-break-after:avoid' 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:4.55pt;text-align:right;
 page-break-after:avoid' 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:4.55pt;text-align:right;
 page-break-after:avoid' 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:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100%</p>
 </td>
 </tr>
</table></center></div>

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

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Smart
expects to make approximately Php97 million of cash contribution to its pension
plan in 2006.</p>

<p 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">The table below presents the expected compulsory
retirement benefits of Smart to be paid out of the fund for the next ten years:</p>

<p style='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:100.88%;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"><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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million pesos)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;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">2006</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 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">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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2009</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">28</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">2010</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">43</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='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2011 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;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">319</p>
 </td>
 </tr>
</table></center></div>

<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">The
PLDT Group 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.  A 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='margin-bottom:0in;margin-bottom:.0001pt' 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 10% per annum.</p>

<p style='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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>18.    Operating Revenues and
Expenses</b></p>

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

<p style='margin-left:.5in;text-align:justify' style="margin-top:0;margin-bottom:0"><i>Service Revenues</i></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:100.78%;margin-left:.4pt;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2003</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 style='text-align:justify' 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-left:40.5pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</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">Wireless
 services</p>
 </td>
 <td   valign=bottom style=' 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>&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' 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:4.3pt;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">Cellular</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>71,502</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' style="margin-top:0;margin-bottom:0">65,818</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">52,750</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">VSAT</p>
 </td>
 <td   valign=bottom style=' 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>1,961</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' style="margin-top:0;margin-bottom:0">1,958</p>
 </td>
 <td   valign=bottom style=' 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">897</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">Fixed lines</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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'>
 <p align=right style='margin-right:4.3pt;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:4.3pt;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">Local exchange</p>
 </td>
 <td   valign=bottom style=' 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>20,210</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' style="margin-top:0;margin-bottom:0">20,606</p>
 </td>
 <td   valign=bottom style=' 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">20,728</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">International long distance</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>12,240</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' style="margin-top:0;margin-bottom:0">12,804</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">12,767</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">National long distance</p>
 </td>
 <td   valign=bottom style=' 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>5,232</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' style="margin-top:0;margin-bottom:0">6,736</p>
 </td>
 <td   valign=bottom style=' 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">6,561</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">Data and other network</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>6,001</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' style="margin-top:0;margin-bottom:0">4,433</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">5,112</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">Miscellaneous</p>
 </td>
 <td   valign=bottom style=' 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>441</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' style="margin-top:0;margin-bottom:0">535</p>
 </td>
 <td   valign=bottom style=' 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">328</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;text-indent:-9.35pt' 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'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,761</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2,014</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' style="margin-top:0;margin-bottom:0">1,343</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 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=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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>120,348</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">114,904</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">100,486</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-left:.5in;text-align:justify' style="margin-top:0;margin-bottom:0"><i>Non-service Revenues</i></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:100.7%;margin-left:.4pt;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2003</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 style='text-align:justify' 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-left:40.5pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</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">Sale of computers, cellular handsets
 and SIM-packs</p>
 </td>
 <td   valign=bottom style=' 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>2,752</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' style="margin-top:0;margin-bottom:0">6,111</p>
 </td>
 <td   valign=bottom style=' 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">10,548</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;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Point-of-product sales</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' style="margin-top:0;margin-bottom:0"><b>235</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">158</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' style="margin-top:0;margin-bottom:0">166</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 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=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;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>2,987</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">6,269</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">10,714</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-left:.5in;text-align:justify;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>Compensation and Benefits</i></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:100.78%;margin-left:.4pt;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='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>2005</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</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='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'>
 <p align=center style='margin-left:40.5pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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">Salaries and benefits</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>11,465</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">10,307</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">11,603</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">Incentive plans (Note 17)</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>1,195</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">308</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">38</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;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Pension and other benefits (Note 17)</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>734</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">835</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(21)</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;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">MRP (Note 11)</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>458</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">566</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">1,565</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;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:
 double windowtext 1.5pt;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>13,852</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,016</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,185</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-left:.5in;text-align:justify' style="margin-top:0;margin-bottom:0"><i>Asset Impairment</i></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:100.78%;margin-left:.4pt;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-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' style="margin-top:0;margin-bottom:0"><b>2005</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2003</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-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:40.5pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million 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:9.35pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Investments (Note 8)</p>
 </td>
 <td   valign=bottom style=' 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>&#150;</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' style="margin-top:0;margin-bottom:0">1,047</p>
 </td>
 <td   valign=bottom style=' 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">&#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">Property, plant and
 equipment (Note 7)</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' style="margin-top:0;margin-bottom:0"><b>11</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">365</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' style="margin-top:0;margin-bottom:0">675</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;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:#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> 11</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">1,412</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">675</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"><i>Financing
Costs</i></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:100.78%;margin-left:.4pt;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-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' style="margin-top:0;margin-bottom:0"><b>2005</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2003</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-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:40.5pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Interest on loans and related items (Note 24)</p>
 </td>
 <td   valign=bottom style=' 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>10,119</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' style="margin-top:0;margin-bottom:0">11,710</p>
 </td>
 <td   valign=bottom style=' 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">12,321</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:9.35pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Financing charges (Note 23)</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' style="margin-top:0;margin-bottom:0"><b>1,436</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' style="margin-top:0;margin-bottom:0">1,157</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' style="margin-top:0;margin-bottom:0">1,317</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:9.35pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Accretion on financial liabilities - net (Notes 12
 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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>568</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' style="margin-top:0;margin-bottom:0">1,185</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' style="margin-top:0;margin-bottom:0">729</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:9.35pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Capitalized interest (Notes 7 and 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:.7pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(504)</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:.7pt;text-align:right' style="margin-top:0;margin-bottom:0">(595)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.7pt;text-align:right' style="margin-top:0;margin-bottom:0">(887)</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:9.35pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Foreign exchange losses (gain) - net (Notes 12 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:.7pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(8,196)</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' style="margin-top:0;margin-bottom:0">2,776</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' style="margin-top:0;margin-bottom:0">9,672</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;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 1.5pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p 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 1.5pt;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 1.5pt !msorm;
 border-right:none !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>3,423</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:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 1.5pt !msorm;
 border-right:none !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">16,233</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:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 1.5pt !msorm;
 border-right:none !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">23,152</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-left:.5in;text-align:justify' style="margin-top:0;margin-bottom:0"><i>Other Income - Net</i></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:100.78%;margin-left:.4pt;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' 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' style="margin-top:0;margin-bottom:0"><b>2005</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:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</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' style="margin-top:0;margin-bottom:0">2003</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 style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:40.5pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million 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:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Gain on debt exchange and debt restructuring
 transactions <br>
 (Php16.59 per share) (Note 12)</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"><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' style="margin-top:0;margin-bottom:0">2,816</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>
 </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">Miscellaneous income
 (expense) - net</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"><b>1,016</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:.7pt;text-align:right' style="margin-top:0;margin-bottom:0">(286)</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">799</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;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:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,016</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' style="margin-top:0;margin-bottom:0">2,530</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' style="margin-top:0;margin-bottom:0">799</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>

<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:0in;margin-bottom:.0001pt;line-height:normal;
punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">19.    Income 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">The
net current and noncurrent components of deferred tax assets (liabilities) recognized
in the consolidated balance sheets follow:</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:100.88%;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' style="margin-top:0;margin-bottom:0"> </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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;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;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-top:0in;margin-right:7.7pt;
 margin-bottom:0in;margin-left:4.65pt;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million
 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
 income tax 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' style="margin-top:0;margin-bottom:0"><b>9,866</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' style="margin-top:0;margin-bottom:0">10,331</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' style="margin-top:0;margin-bottom:0">Net noncurrent deferred income tax assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>13,583</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' style="margin-top:0;margin-bottom:0">9,696</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:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Net noncurrent deferred income tax
 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='text-align:right' style="margin-top:0;margin-bottom:0"><b>(44)</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' 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-bottom:0in;margin-bottom:.0001pt;
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:100.96%;border-collapse:collapse;width:100.96% !msorm;border-collapse:
 collapse !msorm'>

 <tr style='height:5.7pt' style='height:5.7pt !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:5.7pt'>
 <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;height:5.7pt'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:5.7pt'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p 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-top:0in;margin-right:7.7pt;
 margin-bottom:0in;margin-left:4.65pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0">(in million 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">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:5.2pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</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:5.2pt;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:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Allowance
 for doubtful accounts</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,531</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">5,603</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' style="margin-top:0;margin-bottom:0">Unearned
 revenues &#150; others</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>798</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">1,848</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:9.0pt' style="margin-top:0;margin-bottom:0">Unearned
 prepaid card 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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>781</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">848</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' style="margin-top:0;margin-bottom:0">MCIT</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>526</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">359</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:9.0pt' style="margin-top:0;margin-bottom:0">Provision
 for unrealizable 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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>423</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">452</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' style="margin-top:0;margin-bottom:0">Allowance
 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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>337</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">353</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:9.0pt' style="margin-top:0;margin-bottom:0">Past
 service pension cost</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>170</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">192</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' style="margin-top:0;margin-bottom:0">Capital
 lease</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>157</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">181</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:9.0pt' style="margin-top:0;margin-bottom:0">Executive
 stock option plan</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>104</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:4.35pt;text-align:right' 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:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 instruments</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>67</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">151</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:9.0pt' style="margin-top:0;margin-bottom:0">NOLCO</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>14</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">1,072</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">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:5.2pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,458</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' style="margin-top:0;margin-bottom:0">1,073</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:9.0pt' 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:5.2pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>10,366</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">12,132</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">Current liabilities:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.2pt;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:4.35pt;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:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt' 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 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(13)</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">(107)</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' style="margin-top:0;margin-bottom:0">Fair
 value adjustment on investments</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>(27)</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:4.35pt;text-align:right' 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;border-top:
 solid windowtext 1.0pt;background:#F3F3F3;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   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;background:#F3F3F3;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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>10,326</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;background:#F3F3F3;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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">12,025</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:-.25in' 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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>460</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">1,694</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 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">Net current assets</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>9,866</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">10,331</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">Noncurrent 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:4.35pt;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='margin-right:4.35pt;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:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">Asset impairment</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>6,771</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">7,180</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:.3in;text-indent:-12.6pt' 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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>6,414</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">13,011</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">NOLCO</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,926</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' 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='margin-left:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">Excess of debt forgiven over value of consideration
 given</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,636</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">1,867</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">Unrealized
 losses on derivative 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' style="margin-top:0;margin-bottom:0"><b>1,487</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' style="margin-top:0;margin-bottom:0">2,217</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:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">Unearned revenues &#150; others</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,388</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">779</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:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">Past service pension cost</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>861</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">956</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:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">Accrued pension cost</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>783</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">711</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:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">LTIP</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>520</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">113</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:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">Deferred 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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>283</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">311</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:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">Asset retirement obligations</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>157</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">104</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:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">Accelerated 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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,753</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">1,410</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.55pt' style='page-break-inside:
 avoid !msorm;height:7.55pt !msorm'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-top:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.55pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-top:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.55pt'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>25,979</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-top:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:7.55pt'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">28,659</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:9.0pt' 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:#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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,397</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">11,969</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:0in;margin-bottom:.0001pt;line-height:normal' 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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>20,582</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">16,690</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-top:0;margin-bottom:0">Noncurrent liabilities:</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:5.2pt;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;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.35pt;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:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.3in;text-indent:-12.6pt' style="margin-top:0;margin-bottom:0">Intangible assets</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>(210)</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">(51)</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:9.0pt' style="margin-top:0;margin-bottom:0">Capitalized
 taxes and duties - net of amortization</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>(516)</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">(583)</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' style="margin-top:0;margin-bottom:0">Financial
 instruments</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>(794)</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">(1,316)</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:9.0pt' style="margin-top:0;margin-bottom:0">Fixed
 assets componentization</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>(815)</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:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</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">Capitalized
 interest charges - net of amortization</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(4,664)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(5,044)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !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'>
 <p style='margin-left:9.0pt' 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'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(6,999)</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='text-align:right' style="margin-top:0;margin-bottom:0">(6,994)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.9pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.9pt'>
 <p style="margin-top:0;margin-bottom:0">Net noncurrent
 assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.9pt'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>13,583</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.9pt'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">9,696</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.2pt' style='page-break-inside:
 avoid !msorm;height:6.2pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:6.2pt'>
 <p style="margin-top:0;margin-bottom:0">Noncurrent
 liabilities</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:6.2pt'>
 <p align=right style='margin-right:4.35pt;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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:6.2pt'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:4.95pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:4.95pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Unrealized foreign exchange losses</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:4.95pt'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>44</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:4.95pt'>
 <p align=right style='margin-right:4.35pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</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">Provision for (benefit from) income tax 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:100.96%;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=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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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   colspan=3 valign=top style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:40.5pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million 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">Current</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"><b>8,583</b></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">7,357</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">2,331</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">Deferred</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:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(3,734)</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:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(531)</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:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,731)</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,849</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,826</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:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,400)</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-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Mabuhay Satellite and Subic Telecom are registered as
Subic Bay Freeport Enterprises while Clark Telecom is registered as a Clark
Special Economic Zone Enterprise under R.A. No. 7227, otherwise known as the
Bases Conversion and Development Act of 1992, or the Act.  As registrants,
Mabuhay Satellite, Subic Telecom and Clark Telecom are entitled to all the
rights, privileges and benefits established thereunder including tax and
duty-free importation of capital equipment and a 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='margin-left:0in;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, or IT, 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, or ITH, from January 2001.</p>

<p style='margin-left:0in;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">Parlance Systems, Inc., or Parlance, is registered
with the BOI as a new IT export service firm in the field of customer
interaction center on a pioneer status.  Under this registration, Parlance
shall be entitled to certain tax incentives like ITH for six years starting
June 2002.  Parlance is required to comply with specific terms and conditions
stated in its BOI registration.</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">iPlus Intelligent Network, Inc., or iPlus, <a
name="OLE_LINK41">is a wholly-owned subsidiary of ePLDT and </a>is registered
with the BOI as a new IT service firm in the field of application service
provider on a pioneer status.  Under such registration, iPlus is entitled to a
six-year ITH incentive from the actual start of commercial operations until
January 1, 2009.</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' style="margin-top:0;margin-bottom:0">Vocativ Systems, Inc., or Vocativ, is registered with
the Philippine Economic Zone Authority, or PEZA, as an Ecozone Export
Enterprise to develop and operate a call center business that serves overseas
clients by providing customer relationship management services.  As a
registered enterprise, Vocativ is entitled to certain tax and non-tax
incentives which include, among other things, tax and duty-free importations,
exemption from local tax and ITH for four years from start of commercial
operations.  After the ITH period, Vocativ is liable for a final tax, in lieu
of all taxes after the expiration of its incentives.  The final tax is computed
at 5% of gross income less allowable deductions as defined under R.A. No. 7916,
&#147;The Special Economic Zone Act of 1995,&#148; and shall be paid and remitted in
accordance with the amendments contained in R.A. No. 8748, as follows: (a) 3%
to the National Government; and (b) 2% which shall be directly remitted by the
business establishments to the treasurer&#146;s office of the municipality or city
where the enterprise is located.</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">On December 5, 2005, Vocativ received
approval from PEZA for the adjustment of the start of commercial operations,
effectively extending the ITH expiration to the end of March 2006.  An
application for an ITH extension for another two years is pending approval from
PEZA as at March 31, 2006.</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;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">mySecureSign, Inc., or mSSI, is a
wholly-owned subsidiary of ePLDT and is registered with the BOI as a new IT
service firm in the field of services related to public key infrastructure on a
pioneer status. Under such registration, mSSI enjoys, among other incentives, a
six-year ITH from August 1, 2001 or actual start of commercial operations,
whichever comes first.  mSSI started commercial operations on January 1, 2002.</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;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">ePLDT Ventus, Inc., or ePLDT Ventus, is
registered with the BOI as a new IT export service firm in the field of
customer interaction center on a pioneer status.  Under this registration,
Ventus shall be entitled to certain tax incentives such as an ITH for six years
starting March 2005.  In relation to this, Ventus is required to comply with
specific terms and conditions stated in the BOI registration.</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">On May 3, 2001, the BOI awarded Smart pioneer status
for its GSM expansion projects, entitling it to a three-year ITH which expired
on May 2, 2004.  The tax incentive was utilized by Smart on the basis of
incremental income generated from such expansion projects.  In addition, on
July 12, 2001, the BOI awarded Smart pioneer status for its payment
infrastructure projects, entitling it to enjoy a six-year ITH.  In this case,
the tax incentive is availed for the entire taxable income from the projects.
The BOI registration for this projects was cancelled effective September 14,
2004, which resulted in the termination of all incentives granted to Smart
under such registration.</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;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">Wolfpac is registered with the BOI as a
new operator of service provider applications.  Under the terms of its
registration, it is entitled to certain tax and non-tax incentives which
include, among other things, ITH for four years from February 2004.</p>

<p style='margin-left:0in;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">Smart Broadband has three registered activities with the BOI on a
pioneer status, namely: (i) new operator of telecommunications systems
(inter-exchange carrier for data services); (ii) new information technology
service firm in the field of providing internet services; and (iii) new
operator of telecommunications facilities (nationwide broadband wireless
access).  Under the terms of these registrations, Smart Broadband is
entitled to certain tax and non-tax incentives which include, among other
things, an ITH for six years from February 2001, August 2001 and July 2005,
respectively.</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">Income
derived from non-registered activities with the BOI is subject to the normal
income tax rate enacted as at the balance sheet date.</p>

<p style='text-indent:.5in;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">Consolidated
tax incentives availed for the years ended December 31, 2005, 2004 and 2003
amounted to Php235 million, Php2,208 million and Php6,425 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">The balance of NOLCO as at December 31, 2005 may be
used by the particular entities that incurred the losses as deductions against their
future taxable income 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:100.64%;margin-left:.4pt;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='text-indent:1.0in' style="margin-top:0;margin-bottom:0"><b>Year
 Incurred</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=center style='margin-top:0in;margin-right:.05pt;
 margin-bottom:0in;margin-left:8.9pt;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Expiry Date</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='text-align:right' style="margin-top:0;margin-bottom:0">(in million pesos)</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:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0">December 31, 2006</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:31.55pt;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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p 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:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0">December 31, 2007</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:31.55pt;text-align:right' style="margin-top:0;margin-bottom:0">87</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">2005</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:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0">December 31, 2008</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:31.55pt;text-align:right' style="margin-top:0;margin-bottom:0">11,229</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">Total NOLCO</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:4.65pt;text-align:right' 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'>
 <p align=right style='margin-right:31.55pt;text-align:right' style="margin-top:0;margin-bottom:0">11,320</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">Our MCIT as at December 31, 2005
is detailed 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:100.64%;margin-left:.4pt;border-collapse:collapse;width:100.64% !msorm;
 border-collapse:collapse !msorm'>
 <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;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-indent:1.0in' style="margin-top:0;margin-bottom:0"><b>Year
 Incurred</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='margin-top:0in;margin-right:.05pt;
 margin-bottom:0in;margin-left:8.9pt;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Expiry Date</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='text-align:right' style="margin-top:0;margin-bottom:0">(in million pesos)</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:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">2003</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' style="margin-top:0;margin-bottom:0">December 31, 2006</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:31.55pt;text-align:right' style="margin-top:0;margin-bottom:0">42</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">2005</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' style="margin-top:0;margin-bottom:0">December 31, 2008</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:31.55pt;text-align:right' style="margin-top:0;margin-bottom:0">484</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="margin-top:0;margin-bottom:0">Total NOLCO</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:4.65pt;text-align:right' 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:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:31.55pt;text-align:right' style="margin-top:0;margin-bottom:0"> 526</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 reconciliation between the provision for (benefit
from) income tax at the applicable statutory tax rate and the actual provision for (benefit from) 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='margin-left:5.4pt;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=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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</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 million
 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 for income tax at the applicable statutory tax rates</p>
 </td>
 <td  valign=bottom 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>14,875</b></p>
 </td>
 <td  valign=bottom 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">11,149</p>
 </td>
 <td  valign=bottom 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">3,123</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=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"><b>&nbsp;</b></p>
 </td>
 <td  valign=bottom 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=bottom 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=bottom 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>445</b></p>
 </td>
 <td  valign=bottom 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">3,731</p>
 </td>
 <td  valign=bottom 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">2,695</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">Results of operations subject to income
 tax holiday and <br>
 other non-taxable income</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"><b>(1,234)</b></p>
 </td>
 <td  valign=bottom 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">(1,316)</p>
 </td>
 <td  valign=bottom 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">(6,089)</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">Equity share in net losses (income) of
 associates</p>
 </td>
 <td  valign=bottom 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>(2)</b></p>
 </td>
 <td  valign=bottom 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">24</p>
 </td>
 <td  valign=bottom 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">28</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">Differences between statutory tax rate
 and special tax rate <br>
 of certain subsidiaries</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"><b>(1,507)</b></p>
 </td>
 <td  valign=bottom 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">(835)</p>
 </td>
 <td  valign=bottom 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">(490)</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">Changes in valuation allowance</p>
 </td>
 <td  valign=bottom 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>(7,728)</b></p>
 </td>
 <td  valign=bottom 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">(5,927)</p>
 </td>
 <td  valign=bottom 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">(667)</p>
 </td>
 </tr>
 <tr>
 <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 style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Actual provision for (benefit from) income tax</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:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,849</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:#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">6,826</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:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,400)</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">&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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>20.    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='margin-bottom:0in;margin-bottom:.0001pt' 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:100.26%;margin-left:.4pt;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' 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:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>2005</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:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">2004</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:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <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 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Basic</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=right style='margin-right:2.9pt;text-align:right' 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' 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' 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' 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' style="margin-top:0;margin-bottom:0">Diluted</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   colspan=6 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(in million 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' style="margin-top:0;margin-bottom:0">Net income before cumulative effect of change in <br>
 accounting policy</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"><b>40,603</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' style="margin-top:0;margin-bottom:0"><b>40,603</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' style="margin-top:0;margin-bottom:0">28,101</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">28,101</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">11,106</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">11,106</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' style="margin-top:0;margin-bottom:0">Cumulative effect of change in accounting policy</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"><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' 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' 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' 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' style="margin-top:0;margin-bottom:0">(61)</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">(61)</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' 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' style="margin-top:0;margin-bottom:0"><b>(1,677)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:10.35pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(70)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,764)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(285)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,739)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:10.35pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,485)</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' style="margin-top:0;margin-bottom:0">Accretion to redemption value of Preferred Stock
 Subject to Mandatory Redemption and foreign exchange revaluation</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' style="margin-top:0;margin-bottom:0"><b>(1,443)</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' style="margin-top:0;margin-bottom:0"><b>(1,746)</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' style="margin-top:0;margin-bottom:0">(1,503)</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' style="margin-top:0;margin-bottom:0">(1,503)</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' style="margin-top:0;margin-bottom:0">(1,309)</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' style="margin-top:0;margin-bottom:0">(1,309)</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:45.0pt;text-indent:-45.0pt' style="margin-top:0;margin-bottom:0">Net income 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='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>37,483</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' style="margin-top:0;margin-bottom:0"><b>38,787</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' style="margin-top:0;margin-bottom:0">24,834</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' style="margin-top:0;margin-bottom:0">26,313</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' style="margin-top:0;margin-bottom:0">7,997</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' style="margin-top:0;margin-bottom:0">8,251</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   colspan=6 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' 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' style="margin-top:0;margin-bottom:0">Outstanding common shares at beginning of year</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"><b>170,214</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' style="margin-top:0;margin-bottom:0"><b>170,214</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' style="margin-top:0;margin-bottom:0">169,476</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">169,476</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">169,361</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">169,361</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' 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' style="margin-top:0;margin-bottom:0"><b>1,855</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' style="margin-top:0;margin-bottom:0"><b>1,855</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' style="margin-top:0;margin-bottom:0">252</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">252</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">52</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">52</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' style="margin-top:0;margin-bottom:0">Average incremental number of shares under ESOP <br>
 during the year</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"><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' style="margin-top:0;margin-bottom:0"><b>94</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' 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">155</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">&#150;</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' style="margin-top:0;margin-bottom:0">Common shares equivalent of preferred shares deemed
 dilutive:</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"><b>&nbsp;</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' 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: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">&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">&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">&nbsp;</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' style="margin-top:0;margin-bottom:0">      10% Cumulative Convertible Preferred Stock
 (Note 14)</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"><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' style="margin-top:0;margin-bottom:0"><b>2,617</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' 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">3,305</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">&#150;</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' style="margin-top:0;margin-bottom:0">      Preferred Stock Series III (Note 14)</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"><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' 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' 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' style="margin-top:0;margin-bottom:0">7,908</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=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>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">      Preferred Stock Series V (Note 14)</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"><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' 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' 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">&#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">&#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">2,576</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' style="margin-top:0;margin-bottom:0">      Preferred Stock Series VI (Note 14)</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"><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' style="margin-top:0;margin-bottom:0"><b>4,399</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' 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' 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">&#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' style="margin-top:0;margin-bottom:0">4,651</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:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">      Preferred Stock Series VII (Note 14)</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:2.9pt;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 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' 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:#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=' 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' 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: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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,842</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' style="margin-top:0;margin-bottom:0">Weighted average number of common shares for the year</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"><b>172,069</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' style="margin-top:0;margin-bottom:0"><b>183,021</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' style="margin-top:0;margin-bottom:0">169,728</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">181,096</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">169,413</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">180,482</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' style="margin-top:0;margin-bottom:0">Earnings per common share before cumulative effect of
 <br>
 change in accounting policy</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"><b>Php217.84</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' style="margin-top:0;margin-bottom:0"><b>Php211.93</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' style="margin-top:0;margin-bottom:0">Php146.32</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">Php145.30</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">Php47.56</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">Php46.06</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' style="margin-top:0;margin-bottom:0">Cumulative effect of change in accounting policy</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"><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:2.9pt;text-align:right' 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:2.9pt;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 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=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(0.36)</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' style="margin-top:0;margin-bottom:0">(0.34)</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' 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' style="margin-top:0;margin-bottom:0"><b>Php217.84</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' style="margin-top:0;margin-bottom:0"><b>Php211.93</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' style="margin-top:0;margin-bottom:0">Php146.32</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' style="margin-top:0;margin-bottom:0">Php145.30</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' style="margin-top:0;margin-bottom:0">Php47.20</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' style="margin-top:0;margin-bottom:0">Php45.72</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">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 stocks were deemed dilutive.  </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>Dividends Declared For the Years Ended December 31, 2005, 2004 and 2003</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:100.04%;margin-left:.4pt;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=center style='margin-top:3.0pt;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 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2004</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-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Class</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Per Share</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='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Per Share</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Per Share</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;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;height:3.0pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <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;
 height:3.0pt'>
 <p align=center style='margin-bottom:1.0pt;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;
 height:3.0pt'>
 <p align=center style='margin-bottom:1.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million pesos)</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <p align=center style='margin-bottom:1.0pt;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;
 height:3.0pt'>
 <p align=center style='margin-bottom:1.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million pesos)</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <p align=center style='margin-bottom:1.0pt;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;
 height:3.0pt'>
 <p align=center style='margin-bottom:1.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Preferred Stocks Subject to <br>
 Mandatory Redemption</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='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='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='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='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='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">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">Php4.675</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21</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">Php4.675</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;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 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php4.675</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series VI</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">US$0.09925</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">102</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">US$0.09925</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">106</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">US$0.09925</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">113</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-indent: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:#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">JPY10.179725</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">78</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">JPY10.179725</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:22.55pt;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:#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">JPY10.179725</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:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">93</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-indent: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: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'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 201</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">&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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 236</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">&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:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 254</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: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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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:#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"><b>10% Cumulative Convertible <br>
 Preferred Stocks</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:22.55pt;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>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series CC</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">Php1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;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'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;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'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series DD</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series A, I, R, W, AA and BB</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">129</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">130</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">130</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series B, F, Q, V and Z</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">91</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">91</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series E, K, O and U</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">44</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' 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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series C, D, J, T and X</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">58</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">58</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series G, N, P and S</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">1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' 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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' 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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series H, L, M and Y</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">1.00</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">40</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">1.00</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">40</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">1.00</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:26.55pt;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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-indent: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:#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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 409</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">&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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 410</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">&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:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 408</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-bottom: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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Convertible Preferred Stocks</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>
 <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:26.55pt;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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series III</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">US$1.029412</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">968</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">US$1.029412</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,070</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">US$1.029412</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:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,040</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: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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 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;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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:#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"><b>Cumulative Non-Convertible Redeemable
 Preferred Stocks</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>
 <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:26.55pt;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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series IV*</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">&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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">49</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">&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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48</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">&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:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;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;
 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:22.55pt;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:2.9pt;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:22.55pt;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:2.9pt;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:26.55pt;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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Common Stock</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">Php14.00</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,384</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">Php&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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-indent:9.0pt;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">21.00</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,598</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:22.55pt;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">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-indent: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:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21.00</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,642</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">&#150;</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:22.55pt;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'>
 <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'>
 <p align=right style='margin-right:26.55pt;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=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-indent: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:#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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,624</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">&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:22.55pt;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: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:26.55pt;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:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Charged to retained earnings</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">&nbsp;</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,251</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">&nbsp;</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:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,764</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">&nbsp;</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:26.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,751</p>
 </td>
 </tr>
</table></center></div>

<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>*    </i><i>Dividends
are declared based on total amounts, not per share amounts.</i></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"><b>Dividends Declared
Subsequent to December 31, 2005</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%;margin-left:.4pt;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-top:3.0pt' 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'>
 <p align=center style='margin-top:3.0pt;margin-right:2.9pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Date</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:2.9pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' 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'>
 <p align=center style='margin-top:3.0pt;margin-right:2.9pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Amounts</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Class</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Approved</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>of Record</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Payable</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;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='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Per Share</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='margin-top:3.0pt;margin-right:.05pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.0pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <p align=right style='margin-top:0in;margin-right:0in;
 margin-bottom:1.0pt;margin-left:40.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <p align=right style='margin-top:0in;margin-right:0in;
 margin-bottom:1.0pt;margin-left:40.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <p align=right style='margin-top:0in;margin-right:0in;
 margin-bottom:1.0pt;margin-left:40.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <p align=right style='margin-top:0in;margin-right:0in;
 margin-bottom:1.0pt;margin-left:40.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <p align=right style='margin-top:0in;margin-right:0in;
 margin-bottom:1.0pt;margin-left:40.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:3.0pt'>
 <p align=center style='margin-bottom:1.0pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million 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:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0"><b>Preferred Stocks Subject to <br>
 Mandatory Redemption</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' 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">&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">&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">&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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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;text-indent:-.4pt' style="margin-top:0;margin-bottom:0">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' style="margin-top:0;margin-bottom:0">February 27, 2006</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">March 17, 2006</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">April 15, 2006</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">Php4.675</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;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:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-.4pt' style="margin-top:0;margin-bottom:0">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' style="margin-top:0;margin-bottom:0">February 27, 2006</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">March 17, 2006</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">April 15, 2006</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">US$0.09925</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right' style="margin-top:0;margin-bottom:0">23</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:-.4pt' style="margin-top:0;margin-bottom:0">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' style="margin-top:0;margin-bottom:0">February 27, 2006</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">March 17, 2006</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">April 15, 2006</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">&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">JPY10.179725</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:26.55pt;text-align:right' style="margin-top:0;margin-bottom:0">18</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <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;text-indent:-.4pt' style="margin-top:0;margin-bottom:0">&nbsp;</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</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:2.9pt;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:#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=' 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' 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'>
 <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 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right' style="margin-top:0;margin-bottom:0">  42</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:.4pt;text-indent:-.4pt' 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=' 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=' 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=' 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=' 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=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</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:.4pt;text-indent:-.4pt' style="margin-top:0;margin-bottom:0">Common Stock</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' style="margin-top:0;margin-bottom:0">February 27, 2006</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' style="margin-top:0;margin-bottom:0">March 20, 2006</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' style="margin-top:0;margin-bottom:0">April 20, 2006</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' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php28.00</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:26.55pt;text-align:right' style="margin-top:0;margin-bottom:0">5,062</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-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: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 1.5pt;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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:26.55pt;text-align:right' style="margin-top:0;margin-bottom:0">5,104</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">&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: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">21.    Contractual Obligations and Commercial
Commitments</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>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 at December 31, 2005: </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:none;border-top:
 solid windowtext 1.5pt;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-top:
 solid windowtext 1.5pt;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"><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'>
 <p align=center style='margin-left:6.4pt;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 1.5pt;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</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;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"><b>Other long-term</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;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"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Year</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:7.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Long-term debt</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:7.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Operating</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=right style='margin-right:7.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Capital</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>obligations</b><b>(1)</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:7.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>obligations</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: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'>
 <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 style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 million 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">2006</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18,797</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">631</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">895</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:25.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,969</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.4pt;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:6.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">25,292</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;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:22.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,993</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">605</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">341</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:25.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,061</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:22.4pt;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:6.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,000</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">2008</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,633</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">486</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:25.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,061</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:22.4pt;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:6.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,194</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">2009</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,146</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">463</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.35pt;text-align:right;
 page-break-after:avoid' 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:25.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,062</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:22.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,844</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24,522</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">2010</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,386</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:17.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">392</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.35pt;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:25.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,061</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,046</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,893</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">2011 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:22.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">49,358</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:17.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,059</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:13.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">435</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:25.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,184</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:22.4pt;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:6.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">54,036</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:22.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">112,313</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:17.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,636</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:13.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,700</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:25.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,398</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:22.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,890</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:6.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">145,937</p>
 </td>
 </tr>
</table></center></div>

<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"><i>(1)</i><i>    Based
on the original Air Time Purchase Agreement with AIL.</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' 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' style="margin-top:0;margin-bottom:0">For
discussion of our long-term debt obligations<i>,</i> see<i> Note 12 &#150;
Interest-bearing Financial Liabilities.</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>Long-term
Operating 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"><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 at December 31, 2005, PLDT&#146;s
aggregate remaining obligation under these contracts amounted to approximately
Php17 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>License
Agreement with Mobius Management Systems (Australia) 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 at December 31, 2005, PLDT&#146;s aggregate
remaining obligation under this agreement was approximately Php30 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;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Other Long-term Operating 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 Php3,272 million
as at December 31, 2005 in respect of office and cell site rentals with over
3,000 lessors nationwide, PLDT has lease obligations aggregating Php119 million
as at December 31, 2005, and ePLDT has lease obligations aggregating Php198
million as at December 31, 2005 in respect of certain office space rentals.</p>

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

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Long-term
Capital Lease 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">For
a discussion of our long-term capital lease obligations, see <i>Note 12 &#150;
Interest-bearing Financial Liabilities</i>.</p>

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

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Unconditional
Purchase 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>Air
Time Purchase Agreement with AIL.  </i>As
discussed in <i>Note 16 &#150; Related Party Transactions</i>, PLDT is a party to a
Founder NSP Air Time Purchase Agreement entered into with AIL in March 1997,
which was amended in December 1998, under which PLDT was granted the exclusive
right to sell AIL services in the Philippines.  In exchange, the Air Time Purchase
Agreement required PLDT to purchase from AIL a minimum of US$5 million worth of
air time annually over ten years commencing on January 1, 2002, the date of
commercial operations of the Garuda I Satellite.</p>

<p style='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 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 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='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="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 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.  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.  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 would cover,
among other things, 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">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On
February 10, 2004, notwithstanding the ongoing negotiations, AIL advised PLDT
of the termination of the Standstill Agreement and the reinstatement of the
terms under the original Air Time Purchase Agreement effective January 1, 2002
following the lapse of the November 15, 2003 deadline set in the Standstill
Agreement for the negotiation of a revised Air Time Purchase Agreement.
Negotiations are continuing with the relevant parties towards an amicable
settlement of this matter.  See <i>Note 16 &#150; Related Party Transactions</i> and
<i>Note 22 &#150; Provisions and Contingencies </i>for further details relating to
the Air Time Purchase Agreement with AIL.  As at December 31, 2005, PLDT&#146;s
aggregate remaining minimum obligation under the original Air Time Purchase
Agreement was approximately Php11,120 million.</p>

<p 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, a wholly-owned subsidiary
of ePLDT and the Philippines&#146; pioneer in IP-based IT response center, 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 services.  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 delivered
quarterly over a two-year period.  Further to the agreement, <br>
I-Contact will appoint iPlus as the exclusive reseller and ASP for the
Philippine market and will provide iPlus with necessary support in terms of
sales, marketing, and technical services.  Effective March 30, 2004, I-Contact
agreed to amend the agreement and waived all financial obligations and
committed seats requirement over the two-year period.  iPlus will pay all its
remaining obligations pertaining only to the 300 seats delivered by I-Contact.</p>

<p style='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>Sale</i><i> and Purchase Agreement with </i><i>Smart Broadband</i><i>.  </i>For a discussion of our
sale and purchase agreement with Smart
Broadband with a remaining obligation of
Php1,278 million as at December 31, 2005, see <i>Note 9 &#150; Goodwill and Other
Intangible Assets</i>.</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 Long-term Obligations</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>Mandatory Conversion and Purchase of Shares</i>.   As discussed in <i>Note 14 &#150; Preferred Stock
Subject to Mandatory Redemption</i>, as at December 31, 2005, PLDT had 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 plan of Piltel adopted in June 2001.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Each
share of Series V, VI and VII Convertible Preferred Stock is convertible at any
time at the option of the holder into one PLDT common share.  On the date
immediately following the seventh anniversary of the issue date of the Series V
and Series VI Convertible Preferred Stocks 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 PLDT
common shares.  Under a put option exercisable for 30 days, holders of common
shares received on mandatory conversion of the Series V, VI and VII Convertible
Preferred Stocks will be able to require PLDT to purchase such PLDT common
shares for Php1,700 per share, US$36.132 per share, and JPY4,071.89 per
share, respectively.  </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">As
at December 31, 2005, 2,480,553 shares of Series V Convertible Preferred Stock
and 896,190 shares of Series VI Convertible Preferred Stock had been converted
to PLDT common shares.  As at December 31, 2005, 240,887 shares of Series V,
4,398,914 shares of Series VI and 3,842,000 shares of Series VII Convertible
Preferred Stocks remained outstanding.  The aggregate value of the put option
based on outstanding shares as at December 31, 2005 was Php15,890 million, of
which Php8,844 million is puttable on June 4, 2008 and Php7,046 million on June
4, 2009, if all of the outstanding shares of Series V, VI and VII Convertible
Preferred Stocks were mandatorily converted and all the underlying common
shares were put to PLDT.  The market value of the underlying shares of common
stock was Php15,564 million, based on the market price of PLDT common shares of
Php1,835 per share as at December 31, 2005.</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"><b><i>Commercial Commitments</i></b></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">As at December 31, 2005, our outstanding commercial
commitments, in the form of letters of credit, amounted to Php1,493 million.
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' 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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other;
border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>22.    Provisions and Contingencies</b></p>

</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
discussed below, we currently expect that going forward, we will pay local
franchise taxes on an annual basis and based on the gross receipts received or
collected for services rendered within the jurisdiction of the respective
taxing authority.  For this reason, we have made the appropriate provisions in
our consolidated financial statements as at December 31, 2005.</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>NTC supervision and regulation fees, or SRF</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">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 at December 31, 2005, PLDT had paid, since 1994, a total
amount of Php1,960 million in SRF, of which Php1,724 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, stands submitted for decision.</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 and Piltel have similarly received assessments
from NTC for permit, SRF and other charges which were paid under protest.
Total payments by Smart amounted to Php122 million each in 2005 and 2004.  On
February 11, 2005, based on the NTC&#146;s deficiency recomputation, Piltel paid the
amount of Php559 million in respect of NTC fees for the period from 1992 to
2004.  On September 30, 2005, Piltel paid SRF of Php81 million representing
amounts due for 2005.</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>Local business and franchise tax assessments</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">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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The Local Government Code of 1991, or R.A. No. 7160,
which took effect on January 1, 1992, extended to local government units, or
LGUs, 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. No. 7082. </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
believes, based on the opinion of its legal counsel, that R.A. No. 7925, which
took effect on March 16, 1995, and the grant of local franchise and business
taxes exemption privileges to other franchise holders subsequent to the effectivity
of R.A. No. 7160, implicitly restored its local franchise and business taxes
exemption privilege under Section 12 of R.A. No. 7082, or the PLDT Franchise
pursuant to Section 23 thereof or the quality of treatment clause. </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">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. No.
7160.</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">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 tax from several cities and
provinces following PLDT&#146;s decision to stop 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">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 declared not exempt from
the local franchise tax.</p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Although
PLDT believes that it is not liable to pay local franchise and business taxes,
PLDT has entered into compromise settlements with several LGUs, including the
City of Makati, in order to maintain and preserve its good standing and
relationship with these LGUs.  Under these compromise settlements, which have
mostly been approved by the relevant courts, PLDT has paid a total amount of
Php505 million as at December 31, 2005 for local franchise tax covering up to
the end of 2004.</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 the remaining assessments amounting to Php3.7 million as
at December 31, 2005, 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. No. 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 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
overstate the franchise tax.  As at December 31, 2005, there are two cases
pending in the Supreme Court.  The motions for reconsideration of the two other
unfavorable decisions of the Supreme Court have been denied with finality.</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">PLDT currently expects that going forward it will pay
local franchise and business taxes on an annual basis and based on the gross
receipts received or collected for services rendered within the jurisdiction of
the respective taxing authority.</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">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 it 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. No. 7160.</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"><a
name="OLE_LINK63">Smart has recently been
declared exempt from payment of local franchise tax to the City of </a>Makati in a decision
dated August 3, 2004 by the Makati Regional Trial Court, or RTC.  The City of Makati has filed a Motion for Extension to file a Petition for Review with the Court of
Appeals.  However, on June 9, 2005, the Court of Appeals dismissed the appeal
filed by the City of Makati.</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 RTC of Iloilo has likewise ruled in a decision
dated January 19, 2005 that Smart is exempt from payment of local franchise tax
to the City of Iloilo.  The City of Iloilo has filed an appeal directly with
the Supreme Court which remains pending.</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>Piltel&#146;s Bureau of Internal Revenue, or BIR,
Assessment</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">Piltel received the following assessment notices from
the BIR:</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-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:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt;page-break-after:
 avoid' 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 style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Tax Assessment Type</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Basic</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Interest</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:9.05pt;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'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:0in;;
 margin-bottom:0in;margin-left:40.55pt;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">1998</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Value Added Tax, or VAT</p>
 </td>
 <td   valign=bottom style=' 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">85.8</p>
 </td>
 <td   valign=bottom style=' 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">68.7</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0"> 154.5</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;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'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Overseas Communications Tax</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">31.8</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">25.5</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0">  57.3</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;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'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Income Tax</p>
 </td>
 <td   valign=bottom style=' 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">12.4</p>
 </td>
 <td   valign=bottom style=' 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">9.4</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0">  21.8</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;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'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Administrative Penalties</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">0.1</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0">   0.1</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' 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:4.3pt;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:4.3pt;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:9.05pt;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:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">1999</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">VAT</p>
 </td>
 <td   valign=bottom style=' 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">94.5</p>
 </td>
 <td   valign=bottom style=' 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">67.8</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0"> 162.3</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;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'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Income Tax</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">22.7</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">13.8</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0">  36.5</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' 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:4.3pt;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:4.3pt;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:9.05pt;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:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">VAT</p>
 </td>
 <td   valign=bottom style=' 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">56.2</p>
 </td>
 <td   valign=bottom style=' 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">35.1</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0">  91.3</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:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' 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 style='margin-top:0in;margin-right:.05in;margin-bottom:
 0in;margin-left:9.35pt;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Income Tax</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' style="margin-top:0;margin-bottom:0">13.4</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' style="margin-top:0;margin-bottom:0">8.9</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:9.05pt;text-align:right' style="margin-top:0;margin-bottom:0">  22.3</p>
 </td>
 </tr>
</table></center></div>

<p 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">Piltel filed applications for compromise
settlements with the BIR for the deficiency tax assessments of 1998 and 1999,
citing as basis for the compromise settlement its financial incapacity on
account of networth and earnings deficit.  On June 22, 2005, however, Piltel
received a letter from the BIR dated May 9, 2005 denying the applications for
compromise settlements.  </p>

<p 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">On June 16, 2005, Piltel filed an
administrative protest against the 2001 deficiency income tax and VAT
assessments arising from a letter notice.  The BIR granted the request for
reconsideration by virtue of the tax verification notice dated June 29, 2005,
which was received by Piltel on July 1, 2005.  In its letter dated August 30,
2005, which Piltel received on September 19, 2005, the BIR issued its final
decision on the disputed assessment, which denied the administrative protest
filed by Piltel.  On October 19, 2005, Piltel filed a petition for review with
the Court of Tax Appeals relating to this tax assessment.</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">On December 12, 2005, Piltel filed a collective
application for a compromise settlement with the BIR for the deficiency tax
assessments arising from taxable years 1998, 1999 and 2001, citing &#147;reasonable
doubt as to the validity of the tax assessments&#148; as a basis.  The prescribed
minimum percentage of compromise settlement for such basis is 40% of the basic
assessed tax.  On January 27, 2006, Piltel received the favorable
recommendation and approval from the BIR on the said application for a
compromise settlement.  On January 31, 2006, Piltel settled the total amount of
Php114 million, which is equivalent to 40% of the basic taxes per final
assessment notices received, to effect the immediate cancellation of the tax
assessments.  On February 24, 2006, the BIR accepted Piltel&#146;s application for
compromise settlement of income tax and VAT for the years 1998 and 1999 and
income taxes and VAT for the year 2001, and accordingly, issued a certificate
of availment on the said date.</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>Enhanced Voluntary Assessment Program, or EVAP,
Availment</i></p>

<p 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">In 2005, the BIR launched a program
called EVAP, which grants taxpayers, who availed of the program, the privilege
of last priority in audit.  The program covers all types of internal revenue
taxes which can be availed of on a per tax type basis and required the payment
of a certain percentage increase in the said tax compared with the base year or
the established fixed minimum EVAP payment, whichever is higher.</p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT availed of the program and paid a total of Php6
million for VAT and income tax for taxable year 2004 and VAT and withholding
tax for taxable year 2002.</p>

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

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">On the other hand, Maratel availed of the EVAP for
income tax for the taxable year 2004, Subic Telecom availed of the program for
its income tax, withholding tax and percentage tax for taxable year 2002, while
Clark Telecom availed of the program for its income tax for both taxable years
2003 and 2004.  The total payment of Maratel, Subic Telecom and Clark Telecom
amounted to Php800,000.  Smart&#146;s EVAP availment, for which Php53 million was
paid, covered the income tax for the taxable years 2003 and 2004, the VAT for
the taxable year 2002, the overseas communications tax for the year 2002, and
the withholding taxes for the taxable years 2002 to 2004, while Piltel&#146;s EVAP
availment, which involved payment of Php3 million, covered the income tax for
the taxable year 2003 and the expanded withholding tax for the taxable years
2003 and 2004.</p>

<p style='margin-left:.25in' 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">PLDT and these subsidiaries are awaiting
for the EVAP Certificate of Qualification to be issued by the BIR.</p>

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

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Air
Time Purchase Agreement with AIL</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
March 1997, PLDT entered into a Founder NSP Air Time Purchase Agreement with PT
Asia Cellular Satellite as amended in December 1998 and as assigned and
transferred to AIL, under which PLDT was granted the exclusive right to sell
ACeS services in the Philippines.  The Air Time Purchase Agreement required
PLDT to purchase from PT Asia Cellular Satellite at least US$5 million worth of
air time annually over ten years, commencing on January 1, 2002, the date of
commercial operations, and to make supplemental air time purchase payments not
to exceed US$15 million per year during the ten-year term in the event revenues
generated are less than US$45 million in any given year.  Under the Air Time
Purchase Agreement, the air time payment obligations remain in effect until all
indebtedness incurred by AIL has been fully repaid.  See <i>Note 16 &#150; Related
Party Transactions</i> and <i>Note 21 &#150; Contractual Obligations and Commercial
Commitments</i> for detailed discussion of the terms of the agreement.</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
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">&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.  Payments made to AIL under the Air Time
Purchase Agreement based on billings of actual usage and the Standstill
Agreement amounted to US$2 million and US$1 million for the second quarters of
2005 and 2004, respectively.</p>

<p 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 ongoing negotiations, AIL advised PLDT
of the termination of the Standstill Agreement and the reinstatement of the
terms under the original Air Time Purchase Agreement effective January 1, 2002
following the lapse of the November 15, 2003 deadline set in the Standstill
Agreement for the negotiation of a revised Air Time Purchase Agreement.  As at
December 31, 2005, PLDT&#146;s outstanding payables under the original Air Time
Purchase Agreement were approximately Php3,827 million.  Negotiations are
continuing with the relevant parties towards an amicable settlement of this
matter.  See <i>Note 16 &#150; Related Party Transactions </i>and<i> Note 21 &#150;
Contractual Obligations and Commercial Commitments</i> for further discussion.</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 21, 2004, AIL also sent PLDT a letter citing PLDT in default under the Air
Time Purchase Agreement for non-payment of outstanding amounts and for
repudiation of its obligations thereunder.  PLDT maintains, however, that the
termination of the Standstill Agreement and reinstatement of the terms under
the original Air Time Purchase Agreement are premature, considering that the
discussions or negotiations on the terms of the proposed revised Air Time
Purchase Agreement were still pending between the parties, such that it is
highly inequitable for AIL to have unilaterally decided to invoke the
provisions of the Standstill Agreement and declared PLDT in default.
Furthermore, PLDT maintains its position that the Air Time Purchase Agreement
has been rendered ineffective by various events, circumstances and technical
problems encountered in the operation of the business of AIL.  The substantial
changes in the circumstances under which AIL must operate, changes which were
not contemplated by the parties at the time the commitments were made, have
rendered the commitments under the Air Time Purchase Agreement unrealistic and
the performance of the same impossible.</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">As
at December 31, 2005, PLDT&#146;s aggregate remaining minimum obligation under the
original Air Time Purchase Agreement was approximately Php11,120 million.</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">We
made a reasonable estimate of the amount necessary in the event such obligation
would be settled and have made the appropriate provisions in our consolidated
financial statements as at December 31, 2005 with due consideration of AIL&#146;s
existing indebtedness and of PLDT&#146;s share as one of the founder NSPs.  </p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>PLDT&#146;s
LOS to Piltel</i></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">Under the terms of Piltel&#146;s debt restructuring plan,
PLDT issued a Letter of Support, or LOS, 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 or any of its subsidiaries or affiliates on
or after March 23, 2000.  Under the LOS, PLDT is required to provide funding to
Piltel in the event that the cash flow from Piltel&#146;s operations falls short of
the amount required by it to discharge in full its obligations to any creditor
of Piltel and all its operating and financing subsidiaries and affiliates.
PLDT is subject to contractual restrictions limiting the amount of financial
support it can provide to Piltel up to US$150 million.  As at December 31, 2005
and 2004, the remaining undrawn balance available under the PLDT LOS was US$50
million, approximately Php2,666 million (2005) and Php2,831 million (2004), due
to prior investments made from March 23, 2000 to December 31, 2002 aggregating
to US$100 million through PLDT&#146;s subscription to Series J Class I preferred
shares of Piltel.  There has been no drawdown under the LOS in 2005 and 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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>23.    Financial Assets and
Liabilities</b></p>

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

<p style="margin-top:0;margin-bottom:0">Our financial assets and
liabilities are recognized initially at fair value.  Transaction costs (debt
issuance costs) are included in the initial measurement of all financial assets
and liabilities except those classified as financial instruments measured at
fair value through profit and loss.  Subsequent to initial recognition, assets
and liabilities are either valued at amortized cost using the effective
interest rate method or at fair value depending on classification.</p>

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

<p style="margin-top:0;margin-bottom:0">The following table sets forth
the carrying values and estimated fair values of our financial assets and
liabilities recognized as at December 31, 2005 and 2004.  There are no material
unrecognized financial assets and liabilities as at December 31, 2005 and 2004.</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:100.12%;margin-left:.4pt;border-collapse:collapse'>

 <tr style='page-break-inside:avoid;height:11.55pt'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;height:11.55pt'>
 <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:11.55pt'>
 <p align=center style='margin-left:40.55pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Carrying Value</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:11.55pt'>
 <p align=center style='margin-left:40.55pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Fair Value</b></p>
 </td>
 </tr>
 <tr style='height:11.65pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:11.65pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' 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;height:11.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</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:11.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:11.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:11.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</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' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;height:11.5pt'>
 <p align=center style='margin-left:45.05pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</p>
 </td>
 </tr>

 <tr style='height:9.45pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Current Financial Assets</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <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;height:9.45pt'>
 <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;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:11.7pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p style='margin-left:9.0pt' 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:11.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>30,064</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">27,321</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>30,064</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">27,321</p>
 </td>
 </tr>
 <tr style='height:8.55pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Short-term
 investments</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,746</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,873</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,746</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,873</p>
 </td>
 </tr>
 <tr style='height:.15in'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.15in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Trade
 and other receivables</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>7,113</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">7,524</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>7,113</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">7,524</p>
 </td>
 </tr>
 <tr style='height:8.55pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>37</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">335</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>37</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">335</p>
 </td>
 </tr>
 <tr style='height:9.8pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.8pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 current financial assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>39,960</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">39,053</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>39,960</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 9.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">39,053</p>
 </td>
 </tr>
 <tr style='height:11.6pt'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:11.6pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Noncurrent Financial
 Assets</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:11.6pt'>
 <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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:11.6pt'>
 <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:11.6pt'>
 <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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:11.6pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:8.55pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Investments
 - available-for-sale(1)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>109</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">104</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>109</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">104</p>
 </td>
 </tr>
 <tr style='height:6.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 6.3pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 assets</p>
 </td>
 <td   valign=bottom 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,648</b></p>
 </td>
 <td   valign=bottom 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,116</p>
 </td>
 <td   valign=bottom 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,648</b></p>
 </td>
 <td   valign=bottom 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,116</p>
 </td>
 </tr>
 <tr style='height:7.55pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 7.55pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 noncurrent financial assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 7.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,757</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 7.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,220</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 7.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,757</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 7.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,220</p>
 </td>
 </tr>
 <tr style='height:8.45pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:8.45pt'>
 <p style='margin-left:8.6pt' style="margin-top:0;margin-bottom:0"><b>Total
 Financial Assets</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:8.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>42,717</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:8.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">43,273</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:8.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>42,717</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:8.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">43,273</p>
 </td>
 </tr>
 <tr style='height:9.3pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:9.3pt'>
 <p style='margin-left:8.6pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:9.3pt'>
 <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=' border:none;padding:0in 0in 0in 0in;
 height:9.3pt'>
 <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;padding:0in 0in 0in 0in;
 height:9.3pt'>
 <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=' border:none;padding:0in 0in 0in 0in;
 height:9.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:.1in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p style="margin-top:0;margin-bottom:0"><b>Current Financial
 Liabilities</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <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;height:.1in'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:9.45pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Obligations under capital lease(2)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>716</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">425</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>716</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">425</p>
 </td>
 </tr>
 <tr style='height:.1in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Notes payable(2)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">58</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">58</p>
 </td>
 </tr>
 <tr style='height:4.95pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Accounts payable</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' style="margin-top:0;margin-bottom:0"><b>15,482</b></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' style="margin-top:0;margin-bottom:0">8,987</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' style="margin-top:0;margin-bottom:0"><b>15,482</b></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' style="margin-top:0;margin-bottom:0">8,987</p>
 </td>
 </tr>
 <tr style='height:.1in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Derivative liabilities</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>192</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">473</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>192</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">473</p>
 </td>
 </tr>
 <tr style='height:4.95pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Current portion of long-term debt(2)</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' style="margin-top:0;margin-bottom:0"><b>18,797</b></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' style="margin-top:0;margin-bottom:0">28,020</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' style="margin-top:0;margin-bottom:0"><b>19,435</b></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' style="margin-top:0;margin-bottom:0">29,083</p>
 </td>
 </tr>
 <tr style='height:.1in'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 .1in'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Dividends payable</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 .1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>746</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 .1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">652</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 .1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>746</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 .1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">652</p>
 </td>
 </tr>
 <tr style='height:8.45pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.45pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 current financial liabilities</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>35,933</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">38,615</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>36,571</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 8.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">39,678</p>
 </td>
 </tr>
 <tr style='height:4.85pt'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:4.85pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Noncurrent Financial
 Liabilities</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:4.85pt'>
 <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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:4.85pt'>
 <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:4.85pt'>
 <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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:4.85pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:.1in'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Long-term
 debt &#150; net of current portion(2)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>93,516</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">131,377</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>92,811</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">132,803</p>
 </td>
 </tr>
 <tr style='height:9.45pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Obligations
 under capital lease(2)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>381</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">601</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>381</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">601</p>
 </td>
 </tr>
 <tr style='height:.1in'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 liabilities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,777</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,930</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,777</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,930</p>
 </td>
 </tr>
 <tr style='height:9.45pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 9.45pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Preferred stock subject to mandatory redemption</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>12,004</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">14,956</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>14,053</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">18,237</p>
 </td>
 </tr>
 <tr style='height:10.7pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.7pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 noncurrent financial liabilities</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>111,678</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">153,864</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>113,022</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">158,571</p>
 </td>
 </tr>
 <tr style='height:7.55pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.55pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0"><b>Total
 Financial Liabilities</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>147,611</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">192,479</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>149,593</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:7.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">198,249</p>
 </td>
 </tr>
</table></center></div>

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

<p style="margin-top:0;margin-bottom:0"><i>(1)      </i><i>Pertains to investments in club shares.</i></p>

<p style="margin-top:0;margin-bottom:0"><i>(2)      </i><i>Included under &#147;Interest-bearing Financial Liabilities&#148;
in the consolidated balance sheets.</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;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;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">Interest-bearing
Financial Liabilities:</p>

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

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Long-term
debt:</i> Fair value is based on the
following:</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=1 cellspacing=0 cellpadding=0
 style='width:100.54%;margin-left:.4pt;border-collapse:collapse;border:none'>
 <tr>
 <td   valign=bottom 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=bottom 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;background:#E0E0E0;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;
 background:#E0E0E0;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 LIBOR and MART1 rates for similar types of loans.</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;background:#F3F3F3;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;
 background:#F3F3F3;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 regular
 repricing based on market conditions.</p>
 </td>
 </tr>
</table></center></div>

<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"><i>Preferred
stock subject to mandatory redemption:</i>
The fair values were determined using an independent third party valuation
model.</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">Derivative
instruments:</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"><i>Forward
foreign exchange contracts and bifurcated foreign currency forwards:</i> The fair values were determined using forward
exchange market rates at the balance sheet date.</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"><i>Foreign
currency options:</i>  The fair values
were computed using an option pricing model.</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"><i>Foreign
currency and interest rate swaps:</i>
The fair values were computed as the present value of estimated future cash
flows.</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"><i>Bifurcated
equity call options:</i>  The fair values
were computed using an option pricing model.</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">Due
to the short-term nature of the transactions, the fair value of cash and cash
equivalents, short-term investments, trade and other receivables, notes payable
and accounts payable approximate the carrying amounts as of the balance sheet
date.</p>

<p style='text-indent:.5in;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"><i>Derivative Financial Instruments</i></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
derivative financial instruments are accounted for under non-hedge accounting.
Changes in the fair value of these instruments are recognized directly to
income for the period.</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 table below sets out the
information about our derivative financial instruments as at December 31, 2005
and 2004:</p>

<p align=right style='text-align:right;text-indent:.5in' 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:101.0%;margin-left:.4pt;border-collapse:collapse'>

 <tr style='page-break-inside:avoid;height:10.2pt'>
 <td   colspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.5pt;padding:0in 0in 0in 0in;height:10.2pt'>
 <p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></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:10.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2005</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:10.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 <p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 <p style='margin-left:9.0pt' 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-top:0in;margin-right:.1pt;
 margin-bottom:0in;margin-left:.4pt;margin-bottom:.0001pt;text-align:center;
 text-indent:-.4pt' style="margin-top:0;margin-bottom:0"><b>Maturity</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:6.4pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Notional 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'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Mark-to-market Gain (Loss)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:6.4pt;text-align:center' style="margin-top:0;margin-bottom:0">Notional Amount</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:6.4pt;text-align:center' style="margin-top:0;margin-bottom:0">Mark-to-market Gain (Loss)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0"> </p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' 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:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b><i>PLDT</i></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' 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' 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' 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">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Long-term currency swaps</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"><b>&nbsp;</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' 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: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">&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">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.5pt;text-align:right' style="margin-top:0;margin-bottom:0">2017</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$300</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' style="margin-top:0;margin-bottom:0"><b>Php417</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' style="margin-top:0;margin-bottom:0">US$300</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">Php748</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.1pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.1pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.1pt'>
 <p align=right style='margin-right:22.5pt;text-align:right' style="margin-top:0;margin-bottom:0">2012</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.1pt'>
 <p align=right style='margin-right:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>250</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(428)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">250</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:8.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">282</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' 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:15.85pt;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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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"><b>&nbsp;</b></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=' 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 style='page-break-inside:avoid'>
 <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">Long-term foreign currency bought call options</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:22.5pt;text-align:right' style="margin-top:0;margin-bottom:0">2009</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>175</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' style="margin-top:0;margin-bottom:0"><b>301</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' style="margin-top:0;margin-bottom:0">175</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">672</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' 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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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"><b>&nbsp;</b></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=' 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 style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Short-term
 foreign currency bought call options</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;text-align:right' 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' 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' style="margin-top:0;margin-bottom:0">76</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">(198)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' 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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Long-term
 foreign currency sold call options</p>
 </td>
 <td   valign=bottom style=' 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>175</b>(1)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(270)</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' style="margin-top:0;margin-bottom:0">175(1)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(22)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' 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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;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>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Short-term
 foreign currency sold call options</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;text-align:right' 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' 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' style="margin-top:0;margin-bottom:0">76(2)</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">117</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' 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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>JP</b><b>Y</b><b>151</b></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"><b>(2)</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' style="margin-top:0;margin-bottom:0">JPY&#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' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' 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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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"><b>&nbsp;</b></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=' padding:0in 0in 0in 0in'>
 <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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Interest
 rate swap</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$125</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(1,569)</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' style="margin-top:0;margin-bottom:0">125</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(3,468)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' 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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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"><b>&nbsp;</b></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=' padding:0in 0in 0in 0in'>
 <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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Forward
 foreign exchange contracts</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>220</b></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"><b>(169)</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' 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">6</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' 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=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>JP</b><b>Y</b><b>1,282</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' style="margin-top:0;margin-bottom:0"><b>7</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' style="margin-top:0;margin-bottom:0">JPY14</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>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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"><b>&nbsp;</b></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=' 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 style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Bifurcated
 embedded derivatives</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$&#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' 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' style="margin-top:0;margin-bottom:0">US$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">(1)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in' 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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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=' padding:0in 0in 0in 0in'>
 <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=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">Bifurcated
 equity call options</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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>8 shares</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' style="margin-top:0;margin-bottom:0"><b>(1,597)</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' style="margin-top:0;margin-bottom:0">9 shares</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' style="margin-top:0;margin-bottom:0">(1,026)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 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">&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:11.5pt;text-align:right' 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='text-align:right' style="margin-top:0;margin-bottom:0"><b>(3,310)</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' 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='text-align:right' style="margin-top:0;margin-bottom:0">(2,889)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b><i>Smart</i></b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;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:2.9pt;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: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'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Forward
 foreign exchange contracts</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$&#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' 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' style="margin-top:0;margin-bottom:0">US$69</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">(77)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 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">Bifurcated
 embedded derivatives</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:11.5pt;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:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' 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:#E0E0E0;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=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' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-indent:.25in' 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:11.5pt;text-align:right' 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:2.9pt;text-align:right' 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: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='text-align:right' style="margin-top:0;margin-bottom:0">(63)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Net
 liabilities</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:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</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' style="margin-top:0;margin-bottom:0"><b>(Php3,284)</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' 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'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(Php2,952)</p>
 </td>
 </tr>
</table></center></div>

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

<p style="margin-top:0;margin-bottom:0"><i>(1)</i><i>    Sold call options of 2009 long-term foreign
currency options based on the same notional amount as the long-term foreign
currency bought      call options.</i></p>

<p style="margin-top:0;margin-bottom:0"><i>(2)</i><i>    Sold call options of short-term foreign currency
options based on the same notional amount as the short-term foreign currency
bought call       options.</i></p>

<p style='text-indent:.5in' 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:99.96%;margin-left:.4pt;border-collapse:collapse'>

 <tr>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 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-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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.0pt'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:8.0pt'>
 <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:8.0pt'>
 <p align=right style='margin-top:0in;margin-right:7.7pt;
 margin-bottom:0in;margin-left:4.65pt;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in million 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">Presented as:</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>&nbsp;</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">&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">Current assets</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"><b>37</b></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">335</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">Noncurrent assets</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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"><b>2,648</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 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">4,116</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">Current liabilities</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>(192)</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">(473)</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:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Noncurrent 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='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(5,777)</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">(6,930) </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;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net liabilities</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"><b>(3,284)</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">(2,952)</p>
 </td>
 </tr>
</table></center></div>

<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">Analysis of loss on derivative transactions for the
years ended December 31, 2005, 2004 and 2003 are as follows:</p>

<p style='text-indent:.5in' 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:100.0%;margin-left:.4pt;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:0in;margin-bottom:.0001pt;line-height:normal' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2005</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2004</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.0pt'>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in;
 height:8.0pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 padding:0in 0in 0in 0in;height:8.0pt'>
 <p align=center style='margin-left:40.5pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</p>
 </td>
 </tr>

 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Net
 mark-to-market loss at end of year</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(3,284)</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2,952)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2,205)</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:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Net mark-to-market loss at beginning 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='text-align:right' style="margin-top:0;margin-bottom:0"><b>(2,953)</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' style="margin-top:0;margin-bottom:0">(2,205) </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' style="margin-top:0;margin-bottom:0">(637)</p>
 </td>
 </tr>
 <tr>
 <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">Net
 change</p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(331)</b></p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(747)</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,568)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Settlements and accretion</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"><b>(1,405)</b></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">(328)</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>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Gain
 (loss) on contracts entered into and terminated during the year</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(65)</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' style="margin-top:0;margin-bottom:0">211</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(63)</p>
 </td>
 </tr>
 <tr style='height:3.5pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:3.5pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Net
 loss on derivative transactions</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 0in 0in 0in;height:3.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(1,801)</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:#F3F3F3;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(864)</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:#F3F3F3;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,631)</p>
 </td>
 </tr>
</table></center></div>

<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"><b><i>PLDT</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"><i>Long-term Currency Swaps</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;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT entered into long-term principal-only currency
swap agreements with various foreign counterparties intended as economic hedges
of the currency risk on its fixed rate notes maturing in 2009, 2012 and 2017.
As at December 31, 2005 and 2004, these long-term currency swaps have an
aggregate notional amount of US$550 million.  Under these long-term currency
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 U.S.
dollar/Philippine Peso spot exchange rate during the term of the swaps, subject
to a minimum exchange rate.  In March and April 2004, PLDT entered into
amendments to keep the lowest reset exchange rate and unwind the downward
resettable feature of US$550 million of its long-term principal-only currency
swap agreements in order to lower the running hedging cost of the swaps.  As at
December 31, 2005 and 2004, the outstanding swap contracts have an average
exchange rate of Php50.76.</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
order to manage hedge costs, these swaps included a credit-linkage feature 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
amounts 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.  In March 2004, PLDT amended
an additional US$150 million of the long-term currency swaps to include this
credit-linkage feature.  As at December 31, 2005 and 2004 , US$725 million of
PLDT&#146;s long-term currency swaps/options have been structured to include
credit-linkage with PLDT as the reference entity.  The semi-annual fixed or
floating swap cost payments that PLDT is required to make to its counterparties
averaged to about 4.50% and 2.95% per annum as at December 31, 2005 and 2004,
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"><i>Long-term
Foreign Currency Bought Call Options</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">To
manage hedging costs, the currency swap agreement relating to the 2009 fixed
rate notes has been structured to include currency option contracts.  If the
Philippine peso to U.S. dollar spot exchange rate on maturity date settles
beyond Php90.00 to US$1.00, PLDT will have to purchase U.S. dollar at an
exchange rate of Php52.50 to US$1.00 in addition to the excess above the agreed
threshold rate.  On the other hand, if on maturity, the Philippine peso to
US$1.00 spot exchange rate is lower than the exchange rate of Php52.50 to
US$1.00, PLDT will have the option to purchase at the prevailing Philippine
peso to U.S. dollar spot exchange rate.  In July 2004, PLDT and its
counterparty agreed to re-document and re-classify the transaction into
long-term currency option contracts.  The net semi-annual floating hedge cost
payments that PLDT is required to pay under these transactions was
approximately 5.68% and 3.94% per annum as at December 31, 2005 and 2004,
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">The
option currency contract relating to PLDT&#146;s option to purchase U.S. dollar at
Php52.50 to US$1.00 or the prevailing spot rate at maturity, whichever is
lower, is entered into in tandem with an option currency contract relating to
the counterparty&#146;s option to purchase foreign currency from PLDT at Php90.00 to
US$1.00.  See discussion below under &#150; <i>Long-term Foreign Currency Sold Call
Options</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"><i>Short-term Foreign Currency Bought Call Options</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 utilized structures incorporating currency
options to hedge the maturing principal on its fixed rate notes due June 2004
and August 2005.  Under the terms of the contracts, PLDT will have the option
to purchase U.S. dollars at an agreed Philippine peso to U.S. dollar spot
exchange rate or the prevailing spot rate at maturity, whichever is lower.</p>

<p style='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>Long-term
Foreign Currency Sold Call Options</i></p>

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

<p style="margin-top:0;margin-bottom:0">With reference to the
above-mentioned hedge on the PLDT&#146;s 2009 fixed rate notes, PLDT simultaneously
sold a currency option contract with the same notional amount of US$175 million
with the same maturity that gives the counterparty a right to purchase foreign
currency at Php90.00 to US$1.00.  Together with the bought call long-term currency
option contract, PLDT has the obligation to purchase U.S. dollars at an
exchange rate of Php52.50 to US$1.00 plus the excess above the agreed threshold
rate.  In exchange for this condition, the overall net hedging cost for the
transaction is reduced.</p>

<p style='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>Short-term
Foreign Currency Sold Call Options</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">In
order to manage hedge costs, currency option contracts that hedge PLDT&#146;s fixed
rate notes due June 2004 and August 2005 have features similar to those of the
long-term currency option contracts.  PLDT simultaneously sold currency option
contracts with the same notional amounts with the same maturity.  Together with
the bought call short-term currency option contracts, PLDT has the obligation
to buy U.S. dollar at the agreed strike price plus the excess above the agreed
threshold rate should the Philippine peso to U.S. dollar spot exchange rate on
the maturity date settle beyond that agreed threshold.  In exchange for this
condition, the overall net hedging cost for the transactions is reduced.</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">PLDT also entered into short-term
U.S. dollar subsidized and accumulating forwards and Japanese yen currency
option contracts to hedge other short-term foreign currency obligations.</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>Interest
Rate Swap</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">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
Japanese yen amount.  Under this agreement, PLDT is entitled to receive a fixed
coupon rate of 11.375%, provided the Japanese yen to U.S. dollar exchange rate
stays above JP&yen;99.90 to US$1.00.  Below this level, a reduced fixed coupon rate
of 3% will be due to PLDT.  In order to mitigate the risk of the Japanese 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 U.S. dollar to Japanese yen rate to 3% such that the fixed
coupon rate due to PLDT when the JP&yen; strengthens below the agreed threshold
will be 8.375%.  Both swap agreements include a credit-linkage feature with
PLDT as the reference entity.</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>Forward Foreign Exchange Contracts</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 entered into short-term U.S. dollar and Japanese
yen forward foreign exchange contracts to hedge short-term foreign currency
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"><i>Bifurcated
Embedded Derivatives</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">Derivative
instruments include derivatives (or derivative-like provisions) embedded in
non-derivative contracts.  PLDT&#146;s outstanding bifurcated embedded derivative
transactions as at December 31, 2004 covered service contracts denominated in
U.S. dollars paid out to a Japanese company in April 2005.  There are no
outstanding bifurcated embedded derivative transactions as at December 31,
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>Bifurcated Equity Call Options</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">Pursuant to Piltel&#146;s debt restructuring plan, PLDT
issued its Series VI and VII Convertible Preferred Stock, see <i>Note 14 &#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 into shares of PLDT common stock.  For 30
days thereafter, the holders of these mandatorily converted shares of common
stock have the option to sell such shares of common stock back to PLDT for
US$36.132 per share and JPY4,071.89 per share for Series VI and VII,
respectively.  As at December 31, 2005 and 2004, the net negative
mark-to-market value of these embedded call options amounted to Php1,597
million and Php1,027 million, 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>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">Smart
uses forward exchange contracts to hedge foreign currency-denominated assets,
liabilities and firm commitments.  These forward contracts have maturities
ranging from one to six months.</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">Cash deposits, presented as prepayment for forward
purchase contract under &#147;Short-term investments&#148;, amounting to Php3,873 million
collateralize certain of the forward exchange contracts outstanding as at
December 31, 2004.  There were no outstanding prepaid forwards as at December
31, 2005.  The embedded foreign currency derivatives bifurcated from these
prepaid forwards are presented as derivative assets or derivative liabilities.</p>

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

<p style="margin-top:0;margin-bottom:0">Smart&#146;s other embedded
derivatives were bifurcated from service and purchase contracts.  As at
December 31, 2005 and 2004, outstanding contracts included a service contract
with a foreign equipment supplier and various suppliers covering handset
importations payable in U.S. dollars.</p>

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

<p style="margin-top:0;margin-bottom:0"><b>Financial Risk Management
Objectives and Policies</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
main purpose of our financial instruments is to fund our operations.  We also
enter into derivative transactions, the purpose of which is to manage the
currency risks and interest rate risks arising from our operations and our
sources of financing.  It is, and has been throughout the year under review,
our policy that no trading in financial instruments shall be undertaken.</p>

<p style='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
main risks arising from our financial instruments are liquidity risk, foreign exchange
risk, interest rate risk and credit risk.  Our Board of Directors reviews and approves
policies for managing each of these risks.  Our policies for managing these
risks are summarized below.  We also monitor the market price risk arising from
all financial instruments.  Our accounting policies in relation to derivatives
are set out in <i>Note 3 &#150; Summary of Significant Accounting Policies and
Practices</i>.</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>Liquidity Risk</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">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' 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 and equity market issues.</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"><b><i>Foreign Exchange Risk</i></b></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">The
following table shows our consolidated foreign currency-denominated monetary
assets and liabilities and their peso equivalents as at December 31, 2005 and
2004:</p>

<p align=right style='margin-left:.25in;text-align:right;
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:100.88%;margin-left:.4pt;border-collapse:collapse'>

 <tr style='page-break-inside:avoid;height:8.85pt'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;height:8.85pt'>
 <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 0in 0in 0in;height:8.85pt'>
 <p style="margin-top:0;margin-bottom:0">2005</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:8.85pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2004</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:
 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: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: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: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>U.S. Dollar</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;height:15.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Php Equivalent</b><b>(1)</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:15.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S. Dollar</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:15.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Php Equivalent(2)</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' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;height:11.5pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>

 <tr style='height:12.15pt' style='height:12.15pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.15pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Current Financial Assets</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.15pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.15pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.15pt'>
 <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 0in 0in 0in 0in !msorm;height:12.15pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:7.65pt' style='height:7.65pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:7.65pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Cash
 and cash equivalents</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$244</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php12,957</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">US$248</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:7.65pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php13,902</p>
 </td>
 </tr>
 <tr style='height:.15in' style='height:.15in !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.15in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Short-term
 investments</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>55</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,934</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">73</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,090</p>
 </td>
 </tr>
 <tr style='height:13.05pt' style='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='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Trade
 and other receivables</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>139</b></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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>7,371</b></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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">146</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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">8,229</p>
 </td>
 </tr>
 <tr style='height:13.05pt' style='height:13.05pt !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:13.05pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 assets</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:13.05pt'>
 <p align=right style='margin-right:2.9pt;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:#E0E0E0;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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>37</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:13.05pt'>
 <p align=right style='margin-right:2.9pt;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;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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">335</p>
 </td>
 </tr>
 <tr style='height:8.0pt' style='height:8.0pt !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:8.0pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 current financial assets</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:8.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 439</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:8.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>23,299</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:8.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 473</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:8.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">26,556</p>
 </td>
 </tr>
 <tr style='height:13.45pt' style='height:13.45pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.45pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Noncurrent Financial
 Assets</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:13.45pt'>
 <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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.45pt'>
 <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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.45pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:9.0pt' style='height:9.0pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.0pt'>
 <p style='margin-left:8.6pt' style="margin-top:0;margin-bottom:0">Derivative
 assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>50</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,648</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">73</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,116</p>
 </td>
 </tr>
 <tr style='height:.15in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.15in'>
 <p style='margin-left:8.6pt' style="margin-top:0;margin-bottom:0">Notes
 receivable</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>6</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>346</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">286</p>
 </td>
 </tr>
 <tr style='height:11.15pt'>
 <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;height:11.15pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 noncurrent financial assets</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;height:11.15pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>  56</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;height:11.15pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,994</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;height:11.15pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">  78</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;height:11.15pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,402</p>
 </td>
 </tr>
 <tr style='height:13.45pt' style='height:13.45pt !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:13.45pt'>
 <p style='margin-left:8.6pt' style="margin-top:0;margin-bottom:0"><b>Total
 Financial Assets</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;
 height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$</b><b>495</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;
 height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php26,293</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;
 height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">US$551</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:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php30,958</p>
 </td>
 </tr>
 <tr style='height:6.15pt' style='height:6.15pt !msorm'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:6.15pt'>
 <p style='margin-left:8.6pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='margin-left:8.6pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='margin-left:8.6pt' 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;
 height:6.15pt'>
 <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=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:6.15pt'>
 <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=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:6.15pt'>
 <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 0in 0in 0in 0in !msorm;
 height:6.15pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:13.45pt' style='height:13.45pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.45pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Current Financial
 Liabilities</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.45pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.45pt'>
 <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:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.45pt'>
 <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 0in 0in 0in 0in !msorm;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:8.1pt' style='height:8.1pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.1pt'>
 <p style='margin-left:9.0pt' 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;height:8.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$42</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php2,227</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">US$32</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php1,754</p>
 </td>
 </tr>
 <tr style='height:9.45pt' style='height:9.45pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <p style='margin-left:9.0pt' 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;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>68</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,587</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">82</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,599</p>
 </td>
 </tr>
 <tr style='height:.1in' style='height:.1in !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.1in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 liabilities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>192</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.1in'>
 <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:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">473</p>
 </td>
 </tr>
 <tr style='height:9.0pt' style='height:9.0pt !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:9.0pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Interest-bearing
 financial liabilities</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:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' 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:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>17,867</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:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">483</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:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">27,195</p>
 </td>
 </tr>
 <tr style='height:9.35pt' style='height:9.35pt !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:9.35pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 current financial liabilities</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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 450</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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>23,873</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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 607</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:9.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">34,021</p>
 </td>
 </tr>
 <tr style='height:13.45pt' style='height:13.45pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.45pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Noncurrent Financial
 Liabilities</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:13.45pt'>
 <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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.45pt'>
 <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=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.45pt'>
 <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;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:17.55pt' style='height:17.55pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:17.55pt'>
 <p style='margin-left:17.6pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Interest-bearing financial liabilities - net of
 current portion</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:17.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,738</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:17.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>92,218</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:17.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,292</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:17.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">129,108</p>
 </td>
 </tr>
 <tr style='height:11.7pt' style='height:11.7pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:11.7pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Derivative
 liabilities</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:11.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>109</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:11.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>5,777</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:11.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">105</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:11.7pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,930</p>
 </td>
 </tr>
 <tr style='height:9.45pt' style='height:9.45pt !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:9.45pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">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;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>221</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:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>11,702</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:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">222</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:9.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">12,512</p>
 </td>
 </tr>
 <tr style='height:13.45pt' style='height:13.45pt !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:13.45pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Total
 noncurrent financial liabilities</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:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,068</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:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>109,697</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:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,619</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:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">148,550</p>
 </td>
 </tr>
 <tr style='height:13.45pt' style='height:13.45pt !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:13.45pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0"><b>Total
 Financial Liabilities</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:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$</b><b>2,518</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:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php133,570</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:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">US$3,226</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:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php182,571</p>
 </td>
 </tr>
</table></center></div>

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

<p style="margin-top:0;margin-bottom:0"><i>(1)</i><i> The exchange rate used was Php53.062 to US$1.00.</i></p>

<p style="margin-top:0;margin-bottom:0"><i>(2)  </i><i>The exchange rate used was Php56.341 to US$1.00.</i></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 translating the foreign currency-denominated
monetary assets and liabilities into peso amounts, the exchange rates used were
Php53.062 to US$1.00 and Php56.341 to US$1.00, the Philippine peso-U.S. dollar
exchange rates as at December 31, 2005 and 2004, 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">As
at June 28, 2006, the peso-dollar exchange rate was Php53.514 to US$1.00.
Using this exchange rate, our consolidated net foreign currency-denominated
liabilities as at December 31, 2004 would have increased by Php914 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">While
a certain percentage of our revenues is either linked to or denominated in U.S.
dollars, 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 foreign currencies, mostly in U.S. dollars.</p>

<p style='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
at December 31, 2005, approximately 98% of our total consolidated debts were
denominated in foreign currencies, principally in U.S. dollars.  Of our foreign
currency-denominated debts, 3% are in Japanese yen, and the balance in U.S.
dollars.  Thus, a weakening of the Philippine peso against the U.S. dollar or
Japanese yen will increase both the principal amount of our unhedged foreign
currency-denominated debts (representing 53% of our consolidated debts, or 44%
net of our U.S. dollar cash balances as at December 31, 2005), and interest
expense on our debt in peso terms.  In addition, many of our financial ratios
and other financial tests will be negatively affected.  If, among other things,
the value of the Philippine peso against the U.S. dollar substantially 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 <i>Note 12 &#150;
Interest-bearing Financial Liabilities</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">To
manage our 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.</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">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.  </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>Interest Rate Risk</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">On a limited basis, we enter into interest rate swap
agreements in order to manage our exposure to interest rate fluctuations.  We
make use of hedging instruments and structures solely for reducing or managing
financial risks associated with our liabilities and not for trading or
speculative 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">Fixed
rate financial instruments are subject to fair value interest rate risk while
floating rate financial instruments are subject to cash flow interest rate
risk.  </p>

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

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Repricing
of floating rate financial instruments is mostly done on intervals of three
months or six months.  Interest on fixed rate financial instruments is fixed
until maturity of instrument.</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>Credit Risk</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">We
trade only with recognized, creditworthy third parties.  It is our policy that
all customers who wish to trade on credit terms are subject to credit
verification procedures.  In addition, receivable balances are monitored on an
ongoing basis to reduce our exposure to bad debts.</p>

<p style='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 credit risk arising from our other financial assets, which comprise
cash and cash equivalents, certain derivative instruments, our exposure to
credit risk arises from default of the counterparty, with a maximum exposure
equal to the carrying amount of these instruments.</p>

<p style='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 no significant concentrations of credit risk.</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>

<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-top:0in;page-break-after:avoid;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">24.    Reportable Segments </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">Operating segments are components of PLDT that engage
in business activities from which it may earn revenues and incur expenses
(including revenues and expenses relating to transactions with other components
of PLDT), whose operating results are regularly reviewed by the enterprise&#146;s
chief operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance, and for which discrete
financial information is available.  The accounting policies of the reportable
segments are the same as those described in <br>
<i>Note 3 &#150; Summary of Significant Accounting Policies and Practices</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
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;page-break-after:
avoid' 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, Smart and Piltel, Smart
Broadband (formerly Meridian Telekoms, Inc.),
our wireless broadband provider; Wolfpac, our wireless content operator; and
satellite and VSAT operators, namely PLDT&#146;s subsidiaries Mabuhay Satellite,
ACeS Philippines and Telesat;</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;
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, Maratel, Piltel and BCC which together account for
approximately 3% of our consolidated fixed lines in service, and PLDT Global;
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;
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; call center services provided under one umbrella brand name
ePLDT Ventus, including Parlance and Vocativ; internet access and gaming
services provided by ePLDT&#146;s subsidiaries, Infocom Technologies, Inc., Digital
Paradise, Digital Paradise Thailand, netGames and Airborne Access; and
e-commerce and IT-related services provided by other investees of ePLDT, as
described in <i>Note 8 - Investments</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">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 and results of operations of our
reportable segments as at and for the years ended December 31, 2005, 2004 and
2003 reported under U.S. GAAP are as follows:</p>

<p style='text-indent:.5in;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:100.78%;margin-left:.4pt;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=center style='text-align:center' 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'>
 <p align=center style='text-align:center' 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'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Information and 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'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Inter-segment Transactions</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=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:2.7in;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:.05pt;text-align:center' style="margin-top:0;margin-bottom:0">(in million pesos)</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"><i>&nbsp;</i></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"><i>&nbsp;</i></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=' 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=' 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 style='page-break-inside:avoid'>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><i>As at and for the year
 ended December 31, 2005</i></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Revenues</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' 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: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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Service</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">74,195</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">49,431</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">2,953</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(6,231)</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">120,348</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' style="margin-top:0;margin-bottom:0">Non-service</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">2,711</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">41</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">352</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' style="margin-top:0;margin-bottom:0">(117)</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">2,987</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt' style="margin-top:0;margin-bottom:0">Segment revenues</p>
 </td>
 <td   valign=bottom style=' border:none;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">76,906</p>
 </td>
 <td   valign=bottom style=' border:none;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">49,472</p>
 </td>
 <td   valign=bottom style=' border:none;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">3,305</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(6,348)</p>
 </td>
 <td   valign=bottom style=' border:none;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">123,335</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-top:
 double windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:double windowtext 1.5pt;
 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:double windowtext 1.5pt;
 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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Result</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' 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">&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">&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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Operating income</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">37,470</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">10,640</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">52</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">352</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">48,514</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Income before income tax, cumulative
 effect of change in accounting policy and minority interest in net income of
 consolidated subsidiaries</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">40,508</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">5,205</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">57</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">45,770</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">Provision for income tax</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">(4,285)</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">(544)</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">(20)</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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(4,849)</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:22.5pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Net income for the year before cumulative
 effect of change in accounting policy and minority interest in net income of
 consolidated subsidiaries</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' style="margin-top:0;margin-bottom:0">36,223</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' style="margin-top:0;margin-bottom:0">4,661</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' style="margin-top:0;margin-bottom:0">  37</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' 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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">40,921</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' 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:2.9pt;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=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=' 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=' 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>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Assets</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">&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">&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">&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">&nbsp;</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">Segment 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' style="margin-top:0;margin-bottom:0">95,303</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">188,996</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">4,355</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">(42,883)</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">245,771</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:13.5pt' style="margin-top:0;margin-bottom:0">Deferred income tax 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,735</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' style="margin-top:0;margin-bottom:0">16,715</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' 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: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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">23,449</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:22.5pt' style="margin-top:0;margin-bottom:0">Total assets</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' style="margin-top:0;margin-bottom:0">102,038</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' style="margin-top:0;margin-bottom:0">205,711</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' style="margin-top:0;margin-bottom:0">4,354</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' style="margin-top:0;margin-bottom:0">(42,883)</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' style="margin-top:0;margin-bottom:0">269,220</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' 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=' 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=' 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=' 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=' 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>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Investments &#150; at equity</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">&#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">15</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">  15</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">Goodwill</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">15,472</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">426</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">184</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=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">16,082</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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=' padding:0in 0in 0in 0in'>
 <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=' padding:0in 0in 0in 0in'>
 <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=' padding:0in 0in 0in 0in'>
 <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=' padding:0in 0in 0in 0in'>
 <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>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Other
 segment information </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"><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' 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' 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' 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'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Capital expenditures</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">8,827</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">6,432</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">605</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=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">15,864</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Depreciation and amortization</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">9,200</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">18,240</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">415</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">27,855</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">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' style="margin-top:0;margin-bottom:0">253</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">1,944</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">54</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=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">2,251</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence</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">322</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">157</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">&#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"> 479</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">Asset impairment</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=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=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">11</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=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">  11</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">MRP</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">131</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">327</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">&#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"> 458</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:22.1pt;text-indent:-8.6pt' style="margin-top:0;margin-bottom:0">Interest on loans and related items &#150; net
 of capitalized interest</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">952</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">8,639</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">24</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=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>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">9,615</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Interest income</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">1,057</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">385</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">15</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">1,457</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:4.8pt'>
 <td   valign=bottom style=' border:none;border-top:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:4.8pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:double windowtext 1.5pt;
 padding:0in 0in 0in 0in;height:4.8pt'>
 <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:double windowtext 1.5pt;
 padding:0in 0in 0in 0in;height:4.8pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:4.8pt'>
 <p align=right style='margin-left:13.5pt;text-align:right;
 text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:4.8pt'>
 <p align=right style='margin-left:13.5pt;text-align:right;
 text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;height:4.8pt'>
 <p align=right style='margin-left:13.5pt;text-align:right;
 text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt'>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0"><i>As at and </i><i>for
 the year ended December 31, 2004</i></p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-left:13.5pt;text-align:right;
 text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Revenues</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' 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: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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Service</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">68,653</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">48,546</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">2,080</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(4,375)</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">114,904</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' style="margin-top:0;margin-bottom:0">Non-service</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">6,111</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">&#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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">321</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' style="margin-top:0;margin-bottom:0">(163)</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">6,269</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt' style="margin-top:0;margin-bottom:0">Segment revenues</p>
 </td>
 <td   valign=bottom style=' border:none;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">74,764</p>
 </td>
 <td   valign=bottom style=' border:none;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">48,546</p>
 </td>
 <td   valign=bottom style=' border:none;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">2,401</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(4,538)</p>
 </td>
 <td   valign=bottom style=' border:none;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">121,173</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-top:
 double windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:double windowtext 1.5pt;
 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:double windowtext 1.5pt;
 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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Result</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' 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">&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">&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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Operating 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' style="margin-top:0;margin-bottom:0">33,166</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">16,519</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">(634)</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">(512)</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">48,539</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Income (loss) before income tax,
 cumulative effect of change in accounting policy and minority interest in net
 loss (income) of consolidated subsidiaries</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">33,463</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">2,020</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(643)</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">34,840</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">Provision
 for income tax</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">(5,967)</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">(800)</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">(59)</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=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(6,826)</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:22.5pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Net income (loss) for the year before
 cumulative effect of change in accounting policy and minority interest in net
 loss (income) of consolidated subsidiaries</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' style="margin-top:0;margin-bottom:0">27,496</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' style="margin-top:0;margin-bottom:0">1,220</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' style="margin-top:0;margin-bottom:0">(702)</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' 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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">28,014</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Assets</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' 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">&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">&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">&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">&nbsp;</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">Segment 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' style="margin-top:0;margin-bottom:0">89,869</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">196,300</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">3,716</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">(30,871)</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">259,014</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:13.5pt' style="margin-top:0;margin-bottom:0">Deferred income tax 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,164</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' style="margin-top:0;margin-bottom:0">16,846</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' style="margin-top:0;margin-bottom:0">17</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' 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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">20,027</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:22.5pt' style="margin-top:0;margin-bottom:0">Total assets</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' style="margin-top:0;margin-bottom:0">93,033</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' style="margin-top:0;margin-bottom:0">213,146</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' style="margin-top:0;margin-bottom:0">3,733</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' style="margin-top:0;margin-bottom:0">(30,871)</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' style="margin-top:0;margin-bottom:0">279,041</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt' 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=' 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=' 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=' 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=' 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>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Investments &#150; at equity</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">&#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">8</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">8</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">Goodwill</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">15,787</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">426</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">187</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=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">16,400</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p 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' 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=' 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=' 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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Other segment
 information </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' 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"><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' 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' 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' 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'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Capital expenditures</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">14,742</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">4,026</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">500</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=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">19,268</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Depreciation and amortization</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">10,082</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">9,677</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">339</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">20,098</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">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' style="margin-top:0;margin-bottom:0">204</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">3,751</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=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=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">3,955</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence</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">213</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">361</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=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"> 577</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">Asset impairment</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">430</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">365</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">617</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=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">1,412</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">MRP</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</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">553</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">&#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"> 566</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:22.1pt;text-indent:-8.6pt' style="margin-top:0;margin-bottom:0">Interest on loans and related items &#150; net
 of capitalized interest</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">984</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">10,137</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">42</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">(48)</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">11,115</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Interest income</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">724</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">248</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">18</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(48)</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"> 942</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-top:
 double windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:double windowtext 1.5pt;
 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:double windowtext 1.5pt;
 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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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 style='page-break-inside:avoid;height:12.0pt'>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0"><i>As at and </i><i>for
 the year ended December 31, 2003</i></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-left:13.5pt;text-align:right;
 text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-left:13.5pt;text-align:right;
 text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.0pt'>
 <p align=right style='margin-left:13.5pt;text-align:right;
 text-indent:-13.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Revenues</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' 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: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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Service</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">54,635</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">46,820</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">1,467</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2,436)</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">100,486</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' style="margin-top:0;margin-bottom:0">Non-service</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">10,548</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">&#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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">316</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' 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">10,714</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt' style="margin-top:0;margin-bottom:0">Segment revenues</p>
 </td>
 <td   valign=bottom style=' border:none;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">65,183</p>
 </td>
 <td   valign=bottom style=' border:none;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">46,820</p>
 </td>
 <td   valign=bottom style=' border:none;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">1,783</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2,586)</p>
 </td>
 <td   valign=bottom style=' border:none;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">111,200</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-top:
 double windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:double windowtext 1.5pt;
 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:double windowtext 1.5pt;
 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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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:
 double windowtext 1.5pt;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=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Result</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' 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">&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">&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">&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">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Operating 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' style="margin-top:0;margin-bottom:0">18,919</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">14,517</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">(489)</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">432</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">33,379</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:22.5pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Income (loss) before income tax,
 cumulative effect of change in accounting policy and minority interest in net
 loss (income) of consolidated subsidiaries</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">15,163</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(4,911)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(432)</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">9,820</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">Benefit
 from (provision for) income tax</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">(1,672)</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">3,008</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">64</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=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">1,400</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:22.5pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Net income (loss) for the year before
 cumulative effect of change in accounting policy and minority interest in net
 loss (income) of consolidated subsidiaries</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' style="margin-top:0;margin-bottom:0">13,491</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' style="margin-top:0;margin-bottom:0">(1,903)</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' style="margin-top:0;margin-bottom:0">(368)</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' 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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">11,220</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></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=' 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=' 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>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Assets</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' 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">&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">&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">&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">&nbsp;</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">Segment 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' style="margin-top:0;margin-bottom:0">86,696</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">190,510</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">3,040</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">(24,594)</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">255,652</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:13.5pt' style="margin-top:0;margin-bottom:0">Deferred
 income tax 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:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,092</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' style="margin-top:0;margin-bottom:0">17,546</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' style="margin-top:0;margin-bottom:0">74</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' 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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">20,712</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:22.5pt' style="margin-top:0;margin-bottom:0">Total
 assets</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' style="margin-top:0;margin-bottom:0">89,788</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' style="margin-top:0;margin-bottom:0">208,056</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' style="margin-top:0;margin-bottom:0">3,114</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' style="margin-top:0;margin-bottom:0">(24,594)</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' style="margin-top:0;margin-bottom:0">276,364</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' 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=' 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=' 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=' 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=' 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>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Investments &#150; at equity</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">763</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">54</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">817</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">Goodwill</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">14,941</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">426</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">97</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=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">15,464</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p 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=' 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=' 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>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Other segment
 information </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' 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"><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' 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' 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' 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'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Capital expenditures</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">11,372</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">6,393</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">178</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=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">17,943</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Depreciation and amortization</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">12,183</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">9,315</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">314</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">21,812</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">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' style="margin-top:0;margin-bottom:0">72</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">3,950</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">70</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=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">4,092</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence</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">87</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">152</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">12</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"> 251</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">Asset impairment</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">288</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=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">387</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=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"> 675</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">MRP</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">1,560</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">5</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">1,565</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:22.1pt;text-indent:-8.6pt' style="margin-top:0;margin-bottom:0">Interest on loans and related items &#150; net
 of capitalized interest</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">1,348</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">10,034</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">52</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=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">11,434</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' style="margin-top:0;margin-bottom:0">Interest income</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' style="margin-top:0;margin-bottom:0">368</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' style="margin-top:0;margin-bottom:0">138</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' style="margin-top:0;margin-bottom:0">7</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' 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'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 513</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">&nbsp;</p>

</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">25.    Other Matters</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">a.     Supplemental Disclosures of Cash Flow Information</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:101.2%;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='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'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2005</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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</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">2003</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.2pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:13.2pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' padding:0in 0in 0in 0in;
 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 million pesos)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid;height:12.15pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.15pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash paid during the year for:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.15pt'>
 <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;height:12.15pt'>
 <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;height:12.15pt'>
 <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:9.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p style='text-indent:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Income tax </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>9,722</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,478</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,453</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest:  </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <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;height:10.35pt'>
 <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;height:10.35pt'>
 <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:12.6pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <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   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>504</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">595</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">887</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p style='text-indent:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Charged to operations</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10,929</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,310</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,777</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:.15in'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.15in'>
 <p style='text-indent:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest income received</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,408</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">954</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.15in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">484</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:8.55pt'>
 <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;
 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   valign=bottom style=' padding:0in 0in 0in 0in;
 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;
 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:6.75pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:6.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Supplemental schedule of noncash investing and financing activities:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:6.75pt'>
 <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;height:6.75pt'>
 <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;height:6.75pt'>
 <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:9.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <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   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:9.0pt'>
 <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;height:9.0pt'>
 <p align=right style='margin-right:4.3pt;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 0in 0in 0in;height:9.0pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">152</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 6.3pt'>
 <p style='text-indent:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Long-term debt restructured</p>
 </td>
 <td   valign=bottom 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: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;height:
 6.3pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">170</p>
 </td>
 <td   valign=bottom 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:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">208</p>
 </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">b.   Interconnection
Agreements</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">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 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='margin-bottom:0in;margin-bottom:.0001pt' 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='margin-left:.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">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='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Effective
as at 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 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 issued a Public Notice that AT&amp;T&#146;s and MCI&#146;s
circuits on the U.S.-Philippine route were fully restored.  The Order also
removed the Philippines from the list of U.S.-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-left:.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">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-left:.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">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-left:.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">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-left:.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">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.  The U.S. FCC
stated that it was dismissing this request as moot because of the U.S. FCC&#146;s
recently adopted International Settlements Policy Reform Order which eliminated
ISR policies.</p>

<p style='margin-left:.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">Although
not included in the initial list of countries exempted from the U.S. FCC&#146;s
International Settlements Policy, or ISP, the U.S. FCC identified the
U.S.-Philippines route as eligible for being removed from the ISP in accordance
with its newly established procedures for doing so.  Under this procedure, the
U.S. FCC asked for public comment on the removal of the Philippines from the ISP.  In comments filed in June and July 2004, removal was supported by several
Philippine and U.S. carriers, including AT&amp;T and MCI, and was opposed by
one U.S. carrier, International Access, Inc.  In November 2004, the U.S. FCC
exempted a number of additional countries from the ISP, but not the Philippines.  Instead, the U.S. FCC stated that it would rule separately regarding the Philippines after reviewing the issues raised by International Access, Inc.</p>

<p style='margin-left:.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">On
July 6, 2004, PLDT filed with the U.S. FCC a petition for reconsideration of
the U.S. FCC&#146;s May 13, 2004 Order on the grounds that the order should have
vacated as moot the International Bureau&#146;s March 10, 2003 Order.</p>

<p style='margin-left:.5in;text-indent:0in' 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 a decision dated August 15, 2005, the U.S. FCC: (1)
denied PLDT&#146;s petition for reconsideration of the May 13, 2004 Order with
respect to the finding that PLDT and other Philippine carriers, in raising
their rates for termination of international calls from the U.S., &#147;whipsawed&#148;
AT&amp;T and MCI; and (2) removed the U.S.-Philippines route from the
restrictions of the U.S. FCC&#146;s ISP as applied to the termination of such
traffic from the U.S.  In so doing, the U.S. FCC also found that separate
allegations made by International Access, Inc. against PLDT failed to
demonstrate competitive concerns regarding the U.S.-Philippines route that
would warrant retaining the restrictions of the ISP.</p>

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

<p style="margin-top:0;margin-bottom:0">e.   Investigation by U.S. Department of Justice</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">In
January 2004, PLDT received a grand jury subpoena seeking documents and a PLDT
employee was subpoenaed to testify before the grand jury in connection with a
criminal investigation being conducted by the U.S. Department of Justice, or
U.S. DOJ, with respect to alleged anti-trust violations relating to the
provision of international termination services in the Philippines.  The U.S. DOJ has also requested testimony and documents from Smart in connection with
this investigation.  Further, in March 2004, PLDT (U.S.) Ltd., a subsidiary of
PLDT Global, received a grand jury subpoena seeking documents, in response to
which PLDT (U.S.) Ltd. produced documents.  In February 2005, two former
employees of PLDT (U.S.) Ltd. testified before the grand jury in the U.S. DOJ
matter.  A PLDT employee was also scheduled to reappear for testimony in
February, but his appearance has been postponed.  On May 11, 2005, the U.S. DOJ
informed our legal counsel in Washington, D.C., Covington &amp; Burling, that
the U.S. DOJ has terminated its anti-trust investigation relating to
termination rate increases implemented in early 2003 by certain Philippine long
distance carriers including PLDT and that no enforcement action will be taken.</p>

<p style='text-indent:.5in' 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">f.    Employees
and Labor Relations</p>

<p style='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
at December 31, 2005, we had 18,926 employees within the PLDT Group.  PLDT had 9,013
employees at the end of 2005, of which 46% were rank and file employees, 50%
were management/supervisory staff and 4% were executives.  This number
represents a decrease of 463 employees, or approximately 5%, from the staff
level as at the end of 2004, mainly as a result of the ongoing MRP.  From a
peak of 20,312 at the end of 1994, PLDT&#146;s number of employees has declined by 11,299,
or 56%, by the end of 2005.  As at December 31, 2004, we had 18,433 and 9,476 employees
under the PLDT Group and PLDT, 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 38%
of the employees of the PLDT Group.  We consider our relationship with our
rank-and-file employees&#146; union, our supervisors&#146; union and our sales
supervisors&#146; union to be good.</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">On March 8, 2005, PLDT and PLDT Sales Supervisors&#146;
Union, or PSSU, concluded and signed a new three-year Collective Bargaining
Agreement, or CBA, covering the period from January 1, 2005 to December 31,
2007.  This CBA provides 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
Php33,000, including a Php3,000 goodwill bonus, for each member of PSSU.
Furthermore, a Php4,000 one-time clothing allowance was also provided under the
CBA.  </p>

<p style='margin-left:.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">On January 20, 2005, 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 covering the period from January 1,
2005 to December 31, 2007.  This CBA provides each member monthly salary
increases of 8% of basic pay or Php2,000, whichever is higher, for 2005; 10% of
basic pay or Php2,700, whichever is higher, for 2006; and another 10% of basic
pay or Php2,400, whichever is higher, for 2007.  Other highlights of this CBA are
improvements of existing benefits and a one-time signing bonus of Php33,000,
including a Php3,000 goodwill bonus, for each member of GUTS.</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
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 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">In
connection with the separation from service in 2002 of 322 employees who were
engaged in operator-assisted call-handling units, due to redundancies, MKP
brought an unfair labor practice case before the National Labor Relations
Commission, or NLRC, assailing the legality of the implemented redundancy.  On
October 28, 2005, the NLRC dismissed the unfair labor practice case ruling in
favor of the validity of the redundancy.</p>

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

<p style="margin-top:0;margin-bottom:0">g.   ePLDT&#146;s Acquisition of
Level Up!</p>

<p style='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 16, 2006, ePLDT acquired a 60% equity interest in Level Up!, a leading
publisher of online games in the Philippines with about an 80% share of the
online gaming market. &nbsp;The acquisition of Level Up!, together with
netGames, ePLDT&#146;s online gaming subsidiary, will strengthen the position of
ePLDT as the dominant online gaming company in the country.</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">h.   ePLDT&#146;s
Investment in Philweb</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 May 5, 2006, ePLDT and Philweb Corporation, or
Philweb, signed an investment agreement and subscription agreement for ePLDT to
invest in and subscribe to newly issued common shares equivalent to 20% of
Philweb&#146;s outstanding common stock for an aggregate amount of Php502.4
million.  Philweb is primarily engaged in Internet-based gaming and is
currently expected to enable the PLDT Group to gain a firm hold on legitimate
gaming content for the PLDT Group&#146;s cellular, fixed line and wireless broadband
businesses thereby increasing the PLDT Group&#146;s usage of its various network resources.</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.    ePLDT&#146;s
Proposed Acquisition of SPI Technologies</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 May 25, 2006, we announced that ePLDT and SPI Tech,
L.P. entered into a non-binding letter of interest in respect of a potential
acquisition by ePLDT of 100% of SPI Technologies, Inc., or SPI, one of the
leading pure-play business process outsourcing, or BPO, companies and
independent BPO service providers in the world.  We currently expect to use
internally generated cash funds to finance the possible acquisition by ePLDT of
SPI.  We believe that the possible acquisition of SPI would solidify ePLDT&#146;s
position as one of the largest full service BPO companies.   However, there is no obligation on the parties to negotiate
definitive transaction documents and there
is no assurance whether and on which terms the possible acquisition of SPI will
be implemented and, if implemented, whether we will be able to realize any or all of the currently anticipated
benefits of such acquisition.</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">&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='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>26.    Changes in Presentation
of Comparative Consolidated Financial Statements</b></p>

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

<p style="margin-top:0;margin-bottom:0">We have reclassified certain
accounts in 2004 and 2003 consolidated financial statements to conform with our
2005 consolidated financial statements presentation.</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>

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