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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0000078150-06-000045.txt : 20060914
<SEC-HEADER>0000078150-06-000045.hdr.sgml : 20060914
<ACCEPTANCE-DATETIME>20060914065614
ACCESSION NUMBER:		0000078150-06-000045
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060914
FILED AS OF DATE:		20060914
DATE AS OF CHANGE:		20060914

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:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-03006
		FILM NUMBER:		061089595

	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>6-K
<SEQUENCE>1
<FILENAME>foreign_ownership.htm
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</head>

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

<div>

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

<p align=center style='margin:0pt;margin-bottom:.0001pt;text-align:
center' style="margin-top:0;margin-bottom:0"><br>
SECURITIES AND EXCHANGE COMMISSION<br>
 Washington, D.C. 20549 </p>

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

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">FORM 6-K</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Report of Foreign Private Issuer </p>

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

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Pursuant to Rule 13a-16 or 15d-16 <br>
of the Securities Exchange Act of 1934</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" style="margin-top:0;margin-bottom:0"><b>For the month of September 2006</b></h4>

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

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

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Commission File Number 1-03006</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" style="margin-top:0;margin-bottom:0">Philippine Long Distance Telephone Company</h3>

<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 align=center style='text-align:center' 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</b><b> City</b></p>

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

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

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

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">(Indicate by check mark
whether the registrant files or will file annual reports under cover Form 20-F
or Form 40-F.)</p>

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

<p style='margin-left:72.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">Form
20-F      &#214;                                  Form
40-F</p>

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

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">(Indicate by check mark
whether by furnishing the information contained in this Form, the registrant is
also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b) under the Securities Exchange Act of 1934.)</p>

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

<p style='margin-left:72.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">
Yes                                                        No       &#214;</p>

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

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">(If &quot;Yes&quot; is
marked, indicate below the file number assigned to the registrant in connection
with Rule 12g3-2(b): 82- ________ )</p>

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

<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">NOTE REGARDING
FORWARD-LOOKING STATEMENTS</p>

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

<p style='margin-bottom:12.0pt;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">Some information in this report may contain
forward-looking statements within the meaning of Section 27A of the U.S.
Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of
1934.  We have based these forward-looking statements on our current beliefs,
expectations and intentions as to facts, actions and events that will or may
occur in the future.  Such statements generally are identified by
forward-looking words such as &#147;believe,&#148; &#147;plan,&#148; &#147;anticipate,&#148; &#147;continue,&#148; &#147;estimate,&#148;
&#147;expect,&#148; &#147;may,&#148; &#147;will&#148; or other similar words.</p>

<p style='margin-bottom:12.0pt;text-indent:36.0pt' 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
&#147;Item&nbsp;3. Key Information &#150; Risk Factors&#148; in our annual report on Form 20-F
for the fiscal year ended December 31, 2005.  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>

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

<p align=center style='margin-top:0pt;margin-right:10.35pt;margin-bottom:0pt;
margin-left:9.0pt;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h1>

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

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

<p align=center style='margin-top:0pt;margin-right:10.35pt;margin-bottom:0pt;
margin-left:9.0pt;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><b>EXHIBITS</b></h1>

<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>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0  style='width:428.75pt;border-collapse:collapse'>
 <tr>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><u>Exhibit Number</u></p>
 </td>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>
 </td>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><u>Page</u></p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-right:12.6pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p style="margin-top:0;margin-bottom:0">A copy of the
 disclosure letter we sent today to the Philippine Stock Exchange and the
 Securities and Exchange Commission regarding the news article entitled &#147;Aliens
 control PLDT (60% foreign ownership violates Constitution)&#148; published in the






 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </div>
 <p style="margin-top:0;margin-bottom:0">

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

 September 13, 2006 issue of
 Malaya.</p>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">18</p>
 </td>
 </tr>
</table></center></div>

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

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

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  cellpadding=0 cellspacing=0>
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 <td  height=62 style='vertical-align:top'>



 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </div>
 <p style="margin-top:0;margin-bottom:0">

 &nbsp;</td>
 </tr>
</table></center></div>

&nbsp;</p>

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

<p align=right style=';text-align:right' style="margin-top:0;margin-bottom:0">Exhibit 1</p>

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

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

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

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

<p style="margin-top:0;margin-bottom:0">September 14,
2006</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">SECURITIES &amp;
EXCHANGE COMMISSION</p>

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

<p style="margin-top:0;margin-bottom:0">SEC Building, EDSA</p>

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

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

<p style="margin-top:0;margin-bottom:0">Attention:        Director
Justina F. Callangan</p>

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

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

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

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Re       :           Philippine
Long Distance Telephone Company</p>

<p style="margin-top:0;margin-bottom:0">                        SEC
Registration No. PW-55</p>

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

<p style="margin-top:0;margin-bottom:0">In compliance with
Section 17.1(b) of the Securities Regulation Code and SRC Rule 17.1, we submit
herewith five (5) copies of our letter dated September 14, 2006 to the
Philippine Stock Exchange, Inc. regarding the news article entitled &#148;Aliens control PLDT (60% foreign ownership
violates Constitution)&#148; published in the

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 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </div>
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 &nbsp;</td>
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</table></center></div>

September 13, 2006 issue of
Malaya.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Respectfully yours,</p>

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

<p style="margin-top:0;margin-bottom:0"><u>/s/
Ma. Lourdes C. Rausa-Chan</u></p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">MA. LOURDES C. RAUSA-CHAN</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Corporate Secretary</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">MLCRC:amq</p>

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

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

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 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 1 of 18</p>
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 <p style="margin-top:0;margin-bottom:0">

 &nbsp;</td>
 </tr>
</table></center></div>

<br clear=all
style='page-break-before:always'>
Exhibit 1</p>

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

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

<br clear=ALL>

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

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

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

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">SEC FORM 17-C</p>

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

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

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">CURRENT REPORT
UNDER SECTION 17</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">OF THE SECURITIES
REGULATION CODE</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">AND SRC RULE 17.1</p>

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

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
September 14, 2006 </p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">(Date of earliest event reported)</p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SEC Identification Number  PW-55</p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
BIR Tax Identification No. 000-488-793</p>

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

<p align=left style='margin-left:36.0pt;text-align:left;
text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY                                        </p>

<p style="margin-top:0;margin-bottom:0">            Exact
name of issuer as specified in its charter</p>

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

<p style='margin-left:36.0pt;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">5.         PHILIPPINES
6. _____________ (SEC Use Only)  </p>

<p style='margin-left:36.0pt;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">            Province, country or other
jurisdiction                Industry Classification Code</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">
of Incorporation</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">7.         Ramon Cojuangco Building, Makati Avenue, Makati City                    1200 </p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">
     Address of principal office                                                            Postal
Code</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">8.         (632)
816-8553; 816-8556                                 </p>

<p align=left style='text-align:left;text-indent:36.0pt' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">Issuer's telephone number, including
area code</h4>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">9.         Not
Applicable                                                               </p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">            Former
name or former address, if changed since last report</p>

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

<p style='margin-left:36.0pt;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Securities registered pursuant to Sections 8 and 12 of
the Securities Regulation Code or Sections 4 and 8 of the Revised Securities
Act</p>

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

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">            Title
of Each Class                             Number of Shares of Common Stock</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">
          Licensed and Amount of Debt Outstanding</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

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

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 &nbsp;</td>
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</table></center></div>

<br clear=all style='page-break-before:
always'>
Exhibit 1</p>

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

<br clear=ALL>

<p align=left style='margin-left:54.0pt;text-align:left;
text-indent:-54.0pt' style="margin-top:0;margin-bottom:0">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Item 9 &#150; Other Events</p>

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

<p style="margin-top:0;margin-bottom:0">            Attached
hereto is a copy of our letter to the Philippine Stock Exchange, Inc. (&#147;PSE&#148;)
dated September 14, 2006 in connection with the news article entitled &#148;Aliens
control PLDT (60% foreign ownership violates Constitution)&#148; published in the

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 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
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September 13, 2006 issue of
Malaya, together with the letter of our external counsel which sets forth
PLDT&#146;s response to the various issues raised in the columns of Mr. Amado
Macasaet over the past few weeks.</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 align=center style='text-align:center' style="margin-top:0;margin-bottom:0">SIGNATURE</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</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">            Pursuant
to the requirements of the Securities Regulation Code, the Issuer has duly
caused this report to be signed on its behalf by the undersigned hereto duly
authorized.</p>

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

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

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">PHILIPPINE LONG DISTANCE</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">TELEPHONE COMPANY</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><u>/s/ Ma. Lourdes C. Rausa-Chan</u></p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">MA. LOURDES C. RAUSA-CHAN</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Corporate Secretary</p>
 </td>
 </tr>
</table></center></div>

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

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

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Date:  September 14, 2006</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Distribution Copies:  5
copies &#150; Securities &amp; Exchange Commission</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">                        1
copy    - Philippine Stock Exchange</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">                                    1
copy    - Company Secretary</p>

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

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

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</table></center></div>

<br clear=all style='page-break-before:
always'>
Exhibit 1</p>

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

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

<br clear=ALL>

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

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 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
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</table></center></div>

September 14, 2006</p>

<p style='text-align:justify;text-justify:inter-ideograph' 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">The Philippine Stock Exchange</h6>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Disclosure Department</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">4th Floor PSE
Centre</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Exchange Road, Ortigas Center</p>

<p style='margin-left:0pt' style="margin-top:0;margin-bottom:0">Pasig City</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Attention:        Ms.
Jurisita M. Quintos </p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">                        <u>Senior
Vice President </u></p>

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

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

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

<p style="margin-top:0;margin-bottom:0">We refer to your
letter dated September 13, 2006 requesting for confirmation of the information
contained in the news article entitled &#148;Aliens control PLDT (60% foreign
ownership violates Constitution)&#148; published in the

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 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
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September 13, 2006
issue of Malaya, as quoted below:</p>

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

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">

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<i>&#147;By their
own admissions, foreign investors are violating, with obvious impunity, the
Constitution and the law by having more than 60 percent control of Philippine
Long Distance Telephone Co., a public utility where foreign equity is not
allowed to exceed 40 percent.  In submissions to the New York Stock Exchange
where PLDT and its major foreign investor, First Pacific, are listed, the
investments of PCD Nominees Corp., presumed to be an arm of First Pacific
registered in Bermuda, are stated at 31.23 percent.  Together with JP Morgan
Hong Kong Nominees Corp. (Hong Kong) with an investment of 16.37 percent, NTT
Communications Corp. (Japanese), with 6.91 percent and NTT Docomo (Japanese),
with 6.91 percent, the total foreign holdings of common shares in PLDT come up
to 60.4 percent.  These submissions are not identical to disclosures made to
the Philippine Stock Exchange where PLDT is also listed.  In the company
profile submitted to the NYSE, PCD Nominees Corp. with 31.23 percent, is
described as foreign.  The same company with identical equity is described as
&#145;various&#146; in submissions to the PSE.  The number of PLDT board seats was
recently increased from 9 to 13.  NTT has been allowed to nominate two seats.
First Pacific is entitled to six or a total of eight members nominated by
foreign stockholders.  This is equivalent to 60 percent of the board seats and
identical to the extent of foreign holdings.  Based on intertwined
relationships of First Pacific, an Indonesian company operating out of Hong
Kong and registered in Bermuda. x x x&#148;</i></p>

<p align=right style=';text-align:right' style="margin-top:0;margin-bottom:0">Exhibit 1</p>

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-autospace:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-autospace:none' style="margin-top:0;margin-bottom:0">We
categorically deny that foreign ownership of PLDT&#146;s capital exceeds the
constitutional limit of 40 percent and that foreigners control the Board of
PLDT.</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-autospace:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-autospace:none' style="margin-top:0;margin-bottom:0">Foreign
ownership of PLDT&#146;s capital has always been and remains to be below 40 percent
and foreign representation in the Board of PLDT is in proportion to the
percentage of foreign ownership of PLDT&#146;s capital.  As of August 31, 2006, only
122,693,774 shares or 13.7% of the 896,294,802 total subscribed shares of PLDT
were owned by foreigners, with two foreign representations in the Board of
PLDT.</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-autospace:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-autospace:none' style="margin-top:0;margin-bottom:0">PLDT
abides with its avowed principle to comply with all laws, rules and regulations
applicable to us, and vehemently rejects the unfounded and erroneous
allegations in the abovementioned news article.</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-autospace:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-autospace:none' style="margin-top:0;margin-bottom:0">Attached
is the letter of our external counsel which sets forth PLDT&#146;s response to the
various issues raised in the columns of Mr. Amado Macasaet over the past few
weeks.</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-autospace:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

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

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

<p style="margin-top:0;margin-bottom:0"><u>/s/
Ma. Lourdes C. Rausa-Chan</u></p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">MA. LOURDES C. RAUSA-CHAN</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Corporate Secretary</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">MLCRC:amq</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Enc.</p>

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

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<br
clear=all style='page-break-before:always'>
Exhibit 1</p>

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

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

<br clear=ALL>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">                                                                                                September 13, 2006</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Mr. Amado P. Macasaet</b></p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">c/o 371 Bonifacio Drive</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Port Area, Manila</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Dear Mr. Macasaet:</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">Our
client, the Philippine Long Distance Telephone Company (&#147;<b>PLDT</b>&#148;),
requested us to respond to issues raised in your columns over the past few
weeks regarding the ownership of PLDT.  At the outset, we should point out that
these issues result from a misapprehension of both the facts and of the
applicable laws and that they have been raised before.  PLDT has already
responded to those issues to show that it and its shareholders are in full
compliance with all applicable legal requirements; however, since you revisit
these issues, we shall address them yet again. </p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">The
principal issues you have raised pertain to: (a) PLDT&#146;s 1999 acquisition of
Smart Communications, Inc. (&#147;<b>Smart</b>&#148;) as its wholly owned subsidiary from
the latter&#146;s erstwhile shareholders and (b) PLDT&#146;s compliance with the 60%
Filipino shareholding requirement imposed by the Constitution on public
utilities.</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">As
regards the first issue, PLDT&#146;s Board of Directors and shareholders made their
decision to acquire Smart, an extremely profitable company, and approved the
manner of acquiring it, as a wholly-owned subsidiary, with full knowledge of
all the facts and considerations relating to, and in accordance with all of the
legal requirements for making, the acquisition. PLDT&#146;s Board and shareholders
clearly understood and accepted that because they wanted PLDT to acquire Smart
without paying cash for its shares, but by issuing new PLDT common shares in
exchange for the shares of Smart&#146;s erstwhile shareholders, then their (PLDT&#146;s
shareholders&#146;) erstwhile proportionate holdings in PLDT would be diluted.  But
PLDT&#146;s Board and shareholders still approved the acquisition on those terms
because they understood that, in exchange, the value of their PLDT
shares--whose number would not be reduced--would be greatly enhanced because
Smart would end up being a wholly-owned PLDT asset and subsidiary.  </p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">At
the same time, PLDT&#146;s Board and shareholders approved the issuance and sale of
new shares to NTT Communications Corporation (&#147;<b>NTT</b>&#148;), a major Japanese
telecommunications company.  PLDT&#146;s shareholders approved NTT&#146;s entry as a
significant PLDT shareholder through a cash equity infusion because they saw
the value of PLDT&#146;s forming an alliance with NTT by NTT&#146;s becoming a strategic
investor in PLDT.  PLDT&#146;s shareholders waived their pre-emptive rights so that
they could implement these transactions.</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">

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Smart&#146;s and
PLDT&#146;s performance and profitability since these transactions have proven the
wisdom of these decisions.  In any event, since you have repeatedly raised
questions regarding the process followed and disclosures made in connection
with the transactions, we now provide you with data to show not only that all
the parties to the transaction, but also that relevant government agencies, and
the public through them, had all the material facts, and that all applicable
laws and regulations were followed, when implementing the transactions.
Incidentally, most, if not all of these data are publicly available and would
have been readily accessible to you had you chosen to do basic research for
your articles before writing them.</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">Thereafter,
we shall address your second issue and demonstrate that the foreign
shareholding in PLDT is far lower than the 40% maximum limit imposed by the
Constitution on public utilities.  </p>

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

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

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><b>A.         The issuance of PLDT common shares to
stockholders of Smart and to NTT.</b></p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">1.         <u>PLDT&#146;s
stockholders approved the share issuances</u>.  On December 10, 1999,
stockholders holding more than 70% of PLDT&#146;s common and preferred shares
approved, during a special stockholders&#146; meeting, the issuance of 47,297,436
PLDT common shares as follows:</p>

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

<p style="margin-top:0;margin-bottom:0">(a)        35,098,474
PLDT common shares were issued to the erstwhile stockholders of Smart as
consideration and in exchange for Smart&#146;s entire issued capital stock.  This
resulted in Smart&#146;s becoming a wholly owned subsidiary of PLDT.  Contrary to
statements made in your columns, the shares were not issued to Smart itself but
to its shareholders and the proposed transactions also did not involve PLDT&#146;s
acquisition of any shares in Metro Pacific Asset Holdings, Inc. (&#147;<b>MPAH</b>&#148;);
and</p>

<p style='margin-left:72.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:72.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">(b)        12,198,462 PLDT common shares were issued to NTT
for cash (P14.7 billion).  </p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">To
be able to issue the foregoing common shares to Smart&#146;s erstwhile stockholders
and to NTT, it was necessary for PLDT to increase its authorized capital stock
(from P8.5 billion to P9.395 billion) by amending the Seventh
Article of its Articles of Incorporation.  Stockholders representing more than
71% of PLDT&#146;s common and preferred shares approved the increase in
capitalization and its concomitant amendment to the Articles, also at the
December 10, 1999 meeting. </p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">These
approvals were promptly disclosed to the Securities and Exchange Commission (&#147;<b>SEC</b>&#148;)
and the Philippine Stock Exchange (&#147;<b>PSE</b>&#148;) and are a matter of public
record.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">2.         <u>Dilution
of PLDT shareholders; First Pacific interests in PLDT disclosed</u>.
Principally through the notice of meeting and proxy statement (dated October
22, 1999) that PLDT distributed to all of its stockholders for purposes of and
prior to the December 10, 1999 meeting, PLDT categorically <u>advised its
stockholders</u> (and the SEC) that the voting interest of the holders of PLDT
common stock would be diluted as a result of the issuance of PLDT common shares
to Smart&#146;s erstwhile stockholders and to NTT.  (As you know, PLDT was also
required under SEC regulations to submit the notice of meeting and proxy
statement to the SEC, which approved the document prior to its dissemination to
PLDT&#146;s stockholders.)  </p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">

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Philippine
Telecommunications Investments Corporation (&#147;<b>PTIC</b>&#148;) was among the PLDT
shareholders whose holdings were diluted, like the rest of the holders of PLDT
common stock, pursuant to the stockholder approvals given at the December 10,
1999 meeting. As of that date PTIC held 21.41% of PLDT&#146;s common stock and 3.24%
of PLDT&#146;s total outstanding capital stock (that is, common and preferred
shares).  After the December 10, 1999 resolutions were implemented, PTIC held
approximately 15.4% of PLDT&#146;s common stock and 3.06% of PLDT&#146;s total
outstanding capital stock.  (As of August 31, 2006, these figures were 13.87%
and 2.91%, respectively.)  </p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0"><u>Reduction of government&#146;s indirect proportionate interests in PLDT</u>.  As you must know,
Prime Holdings, Inc. (&#147;<b>PHI</b>&#148;) owns 46% of PTIC, and PHI&#146;s PTIC
shareholdings were the principal subjects of G.R. No. 149802 and related cases,
which the Supreme Court recently resolved in favor of the government.  Pursuant
to the Supreme Court&#146;s Decision in G.R. No. 149802, it is in this corporation,
PHI, that the government owns shares; the government does not own shares in
PLDT itself (or in PTIC). At any rate, the reduction in the government&#146;s
indirect proportionate interests in PLDT (held through PHI and PTIC) resulting
from the approvals given by PLDT stockholders during their December 10, 1999
special meeting was the necessary effect of PLDT&#146;s shareholders, including
PTIC, deciding to enhance PLDT&#146;s value by acquiring Smart from its former
shareholders in exchange for new shares in PLDT, thereby making Smart a
wholly-owned PLDT subsidiary.<a href="#_ftn1" name="_ftnref1" style="font-size:8pt"  title=""><sup>[1]</sup></a>  That
decision made by PLDT&#146;s shareholders is binding on PLDT&#146;s entire stockholding
body.<a href="#_ftn2" name="_ftnref2" style="font-size:8pt"  title=""><sup>[2]</sup></a>
Moreover, the additional value brought to PLDT shares by PLDT&#146;s acquisition of
Smart and the entry of NTT benefits the government as an indirect holder of
interests in PLDT through PHI and PTIC.   </p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">PLDT
further disclosed to its stockholders that upon completion of the proposed
transactions, the First Pacific Group&#146;s direct and indirect economic interest
in the company&#146;s increased issued common capital stock would go up to
approximately 22.8% (from 17.5%), while NTT&#146;s would be approximately 15%.  </p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">In
this connection, the company&#146;s notice of meeting and proxy statement for the
December 10, 1999 meeting also informed PLDT stockholders--and the SEC--that
(a) Larouge B.V. (&#147;<b>Larouge</b>&#148;) and MPAH collectively acquired a 52.7%
interest in PTIC in November 1998, which had increased to 53.9%; (b) PTIC owned
approximately 21.5% of PLDT&#146;s common stock; (c) Larouge was an indirect
wholly-owned subsidiary of First Pacific Company Limited (&#147;<b>First Pacific</b>&#148;);
and (d) First Pacific also held an indirect economic interest in MPAH.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">PLDT&#146;s
stockholders had the full benefit of these disclosures before they approved the
increase in capital stock and the share issuances to allow for the acquisition
of Smart and the entry of NTT. </p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">

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3.         <u>Share
issuance to NTT; PLDT stockholders agreed to waiver of pre-emptive rights</u>.
Contrary to your misrepresentation, NTT was not accorded any &#147;special
treatment&#148; in relation to the issuance to it of PLDT common shares.  It is
completely untrue that PLDT stockholders were not asked to waive their
pre-emptive rights to those shares.  On the contrary, the agenda of the
December 10, 1999 special PLDT stockholders&#146; meeting specifically included
consideration by PLDT&#146;s stockholders of a further amendment to the Seventh
Article of PLDT&#146;s Articles of Incorporation, Subdivision B(4) for them to waive
the pre-emptive rights of holders of PLDT common shares to subscribe for any
issue of 12,198,462 common shares to NTT (or an NTT subsidiary) for cash.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">Stockholders
representing more than 70% of PLDT&#146;s common and preferred shares approved the
foregoing amendment and the waiver of their pre-emptive rights, also at the
December 10, 1999 meeting.  Accordingly, the Seventh Article of the Articles
has since provided as follows:</p>

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

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">***</p>

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">B.         Common
Capital Stock</p>

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">***</p>

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">4.         <u>The ownership of shares of Common Capital
Stock shall not entitle the owner thereof to any right (other than such right,
if any, as the Board of Directors in its discretion may from time to time
grant) to subscribe for or to purchase or to have offered to him for
subscription or purchase</u> (a) any issue of shares of any class of preferred
stock of the corporation, (b) <u>any issue of up to 12,198,462 shares of common
capital stock, for cash, to NTT Communications Corporation (or a subsidiary
thereof) as a strategic investor in the Corporatio</u>n, and (c) any issue of
up to 1,289,745 shares of common capital stock pursuant to the Executive Stock
Option Plan which was approved by the Board of Directors on April 27, 1999 ***</p>

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(Underscoring supplied)  </p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">            These
approvals are also a matter of public record, because they were promptly
disclosed to the SEC and the PSE.  In fact, PLDT&#146;s Articles are a public
document you could--and, in fact, should--have inspected at or obtained from
the SEC before making your allegations.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">4.         <u>PLDT&#146;s
acquisition of Smart and issuance of common shares to NTT disclosed to and
approved by its stockholders and the relevant regulators</u>.  It is also not
true, contrary to your misrepresentations, that the issuance of PLDT common
shares to Smart&#146;s then-stockholders and to NTT &#147;[was] not *** disclosed to the
PSE.&#148;  As we have said, these transactions (and their incidents and
consequences) were fully disclosed to and approved by not only PLDT&#146;s
stockholders, but also the relevant regulators, more specifically:</p>

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

<p style='margin-left:36.0pt' style="margin-top:0;margin-bottom:0">(a)        The SEC, which on March 17, 2000 approved
the amendments to PLDT&#146;s Articles (including the increase in the company&#146;s
capital stock, which enabled the share issuances to Smart&#146;s shareholders and to
NTT and the denial of pre-emptive rights).  In addition, PLDT timely submitted
to SEC, and the latter approved, the notice and proxy statement and the information
statements for the December 10, 1999 special stockholders&#146; meeting;</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">

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 </tr>
 <tr>
 <td></td>
 <td  height=34 style='vertical-align:top'>



 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 9 of 18</p>
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</table></center></div>

&nbsp;</p>

<br clear=ALL>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(b)        The PSE, which approved PLDT&#146;s application to
list the common shares issued to Smart&#146;s erstwhile stockholders and to NTT; the
newly-issued common shares were approved for listing by the PSE Board of
Governors on April 12, 2000 and actually listed on the exchange on April 28,
2000; and</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(c)        The National Telecommunications Commission (&#147;<b>NTC</b>&#148;),
which on December 17, 1999 approved PLDT&#146;s acquisition of Smart&#146;s entire issued
capital stock in the proceeding docketed as BMC Case No. 99-283.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">In
other words, the transactions approved by PLDT&#146;s stockholders on December 10,
1999 likewise received the unqualified imprimatur of no less than three
government agencies.  All of these approvals are also a matter of public
record, which you could have easily verified had you the slightest interest in
ascertaining the facts before making your allegations.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(PLDT
likewise fully disclosed the transactions to the United States Securities &amp;
Exchange Commission and the New York Stock Exchange (&#147;<b>NYSE</b>&#148;) where, as
you know, PLDT&#146;s common shares and American Depositary Shares are also listed.)</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">5.         <u>Valuation
of the Smart capital stock acquired by PLDT disclosed to PLDT&#146;s stockholders
and determined to be fair to PLDT; PLDT&#146;s investment in Smart validated</u>.
The notice of meeting and proxy statement disseminated by PLDT for the December
10, 1999 special stockholders&#146; meeting discussed PLDT&#146;s valuation for the Smart
capital stock it proposed to acquire.  In particular, the company disclosed
that each outstanding share of Smart common stock would be exchanged for
0.01285 PLDT common shares.  Consequently, you are wrong to assert that Smart
shares were valued higher than PLDT shares in this transaction.  Moreover, the
investment bank Morgan Stanley Dean Witter, which acted as financial advisor to
the Special Committee created by the PLDT Board to evaluate the transaction,
issued a September 28, 1999 opinion declaring that &#145;the consideration to be
paid by PLDT [for Smart&#146;s outstanding capital stock] was fair from a financial
point of view to PLDT.&#148;<a href="#_ftn3" name="_ftnref3" style="font-size:8pt"  title=""><sup>[3]</sup></a></p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">As
we have said, Smart&#146;s consistently excellent financial performance over the
years validates PLDT&#146;s investment.  Smart is the leading mobile phone company
in the Philippines today, and in 2005 contributed, as a wholly owned
subsidiary, no less than 60% of PLDT&#146;s revenues.  This helped enable PLDT to
generate net profits of P34.5 billion in 2005, which in turn enabled it
to declare a total of P12.3 billion in dividends to holders of its
common stock for that year, representing 40% of PLDT&#146;s core earnings per
share.  </p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>B.        PLDT&#146;s foreign
equity levels comply with the law.</b></p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  cellpadding=0 cellspacing=0>
 <tr>
 <td  height=34 style='vertical-align:top'>



 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 10 of 18</p>
 </div>
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 </tr>
</table></center></div>

It is
apparently your &#147;conclusion&#148; that &#147;First Pacific by its direct or indirect
Relationship <i>[sic]</i> with NTT, Docomo, Larouge B.V. has Violated <i>[sic]</i>
the Constitution and the laws when its or their Investments <i>[sic]</i>
exceeded the 40 percent limit on public utilities.&#148; Indeed, you have also seen
fit to make the completely false and irresponsible misrepresentation that a
&#147;60% foreign ownership [of PLDT] violates [the] Constitution.&#148;</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">These
allegations are completely baseless and erroneous.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">1.         <u>Regulators
are aware of PLDT&#146;s shareholding structure</u>.  To begin with, PLDT stresses
that its shareholding structure is regularly reported to and is known to
regulators such as the SEC, PSE, and the NYSE principally through the various
disclosures and reports that PLDT, as a publicly listed telecom-munications
company, regularly submits to them.<a href="#_ftn4" name="_ftnref4" style="font-size:8pt"  title=""><sup>[4]</sup></a></p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">PLDT&#146;s
Annual Report for 2005 (SEC Form 17-A)--which was filed with the SEC, submitted
to the PSE, and widely disseminated to the company&#146;s stockholders--sets forth
information (as of April 17, 2006) on holders of at least 5% of the company&#146;s
common stock.  These holders include:</p>

<p style='text-align:justify;text-justify:inter-ideograph' 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='border-collapse:collapse;border:none'>

 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Name of Holder of </b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>PLDT Common Stock</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Nationality</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Number of PLDT Common
 Shares Held</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>as of April 17, 2006</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>% to Total Outstanding
 Common Stock</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>as of April 17, 2006</b></p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">PCD
 Nominee Corporation</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Filipino<a href="#_ftn5"
 name="_ftnref5" style="font-size:8pt"  title=""><sup>[5]</sup></a></p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">71,741,717<a
 href="#_ftn6" name="_ftnref6" style="font-size:8pt"  title=""><sup>[6]</sup></a></p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">39.54%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">J.P. Morgan Hong Kong Nominees Limited</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Hong Kong</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">29,918,502</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">16.49%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">PTIC</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Filipino</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">26,034,263</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">14.35%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">Metro
 Pacific Resources, Inc. (&#147;<b>MPRI</b>&#148;)</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Filipino</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">17,112,534</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">  9.43%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:18.0pt;text-align:justify;text-justify:
 inter-ideograph;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">NTT<a href="#_ftn7" name="_ftnref7" style="font-size:8pt"  title=""><sup>[7]</sup></a></p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Japanese</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">12,633,487</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">6.96%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:18.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">NTT DoCoMo, Inc (&#147;<b>DoCoMo</b>&#148;)</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Japanese</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">12,633,486</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">6.96%</p>
 </td>
 </tr>
</table></center></div>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">The
Annual Report indicates that there were 181,432,721 PLDT common shares
outstanding as of April 17, 2006.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">On
the other hand, the stockholding figures in PLDT&#146;s latest filing with the NYSE
(Form 20-F, for 2005) were as of May 31, 2006.<a href="#_ftn8" name="_ftnref8" style="font-size:8pt"
title=""><sup>[8]</sup></a></p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  cellpadding=0 cellspacing=0 align=left>
 <tr>
 <td  height=293></td>
 </tr>
 <tr>
 <td></td>
 <td  height=33 style='vertical-align:top'>



 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 11 of 18</p>
 </div>
 <p style="margin-top:0;margin-bottom:0">

 &nbsp;</td>
 </tr>
</table></center></div>

&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=1 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border:none'>

 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <br clear=ALL>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Name of Holder of </b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>PLDT Common Stock</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Citizenship</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Number of PLDT Common
 Shares Held</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>as of May 31, 2006</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">% to Total
 Outstanding Common Stock</p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>as of May 31, 2006</b></p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">PCD
 Nominee Corporation</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph;
 text-indent:.7pt' style="margin-top:0;margin-bottom:0">Philippine
 Corporation</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">72,125,189</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">39.66%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">J.P. Morgan Hong Kong Nominees
 Limited</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Hong Kong</p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Corporation</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">29,921,268</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">16.45%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">PTIC</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Philippine Corporation</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">26,034,263</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">14.32%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">MPRI</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Philippine Corporation</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">17,112,534</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">9.41%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">NTT</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Japanese</p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Corporation</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">12,633,487</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">6.95%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:9.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">DoCoMo</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Japanese</p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Corporation</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">12,633,486</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">6.95%</p>
 </td>
 </tr>
</table></center></div>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">The
Form 20-F indicates that 180,789,003 PLDT common shares were outstanding as of
December 31, 2005.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">We
wish to emphasize the following:</p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(a)        There is no inconsistency between PLDT&#146;s Annual
Report (filed with the SEC and PSE) and its Form 20-F (filed with the NYSE).
Specifically, both filings indicate that the &#147;[c]itizenship&#148; of the PCD Nominee
Corporation is a &#147;Philippine Corporation&#148; because it is a juridical entity
organized and existing under Philippine law.  Moreover, based on the SEC
filings of the PCD Nominee Corporation and the Philippine Depository Trust Corporation
(&#147;<b>PDTC</b>&#148;), practically 100% of the PCD Nominee Corporation is owned by
the PDTC, which in turn is at least 60% Filipino-owned.  Consequently, PCD
Nominee Corporation is plainly a Filipino corporation. (Contrary to the
statement in your September 5 fax to Mr. Manuel V. Pangilinan, PLDT&#146;s Form 20-F
does <u>not</u> indicate that the PCD Nominee Corporation is &#147;foreign&#148; or has a
31.23% shareholding in PLDT.)  </p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(b)        PLDT does not inquire into the beneficial owners
or customers of the broker-participants of the PDTC who have lodged shares with
them.  In fact, even the PCD&#146;s reports to PLDT do not go beyond the list of
broker-participants and their PLDT common shareholdings.</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  cellpadding=0 cellspacing=0>
 <tr>
 <td  height=34 style='vertical-align:top'>



 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 12 of 18</p>
 </div>
 <p style="margin-top:0;margin-bottom:0">

 &nbsp;</td>
 </tr>
</table></center></div>

As far as
PLDT is aware, First Pacific is not the beneficial owner of all of the PLDT
common shares of the &#147;various&#148; (foreign) persons included in the PCD Nominee
Corporation.  For example, although PLDT&#146;s Annual Report and Form 20-F indicate
that Larouge holds more than 8 million PLDT common shares lodged with the PCD
Nominee Corporation, both of the reports also disclose that the PCD account
likewise includes PLDT common shares held by an FMR Corporation, which is
apparently a U.S. corporation incorporated in Bermuda.  PLDT is not aware, and
has no reason to believe, that FMR Corporation is a First Pacific affiliate.  </p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">In this connection, NTT and DoCoMo are also not First
Pacific affiliates.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">(c)        It is correct that the
aggregate holdings of PLDT common stock of the &#147;various&#148; (foreign) persons
included in the PCD Nominee Corporation, J.P. Morgan Hong Kong Nominees
Limited, NTT, and DoCoMo (at least as of April 17, 2006) amounted to about
61.8% of the PLDT common stock outstanding as of that date.  </p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">However, contrary to your &#147;conclusion,&#148; this equity level
does <u>not</u> breach the 40% foreign ownership restriction for public
utilities.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">2.         <u>A
corporation&#146;s total outstanding capital stock, consisting of its common and
preferred shares, is considered in determining compliance with applicable
nationality restrictions</u>.  Your &#147;conclusion&#148; appears to be based on the
misimpression that only a corporation&#146;s <i>common</i> stock should be counted
in computing the levels of its foreign ownership and, necessarily, in
determining compliance with nationality restrictions for public utilities.  </p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">That
view is incorrect.  The <i>entirety</i> of a corporation&#146;s outstanding capital
stock--consisting of <i>all</i> of its common <u>and</u> preferred shares--must
be considered, and is the correct basis, for ascertaining such ownership levels
and compliance.  This is clear from the following:</p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(a)        Article XII, Section 11 of the Constitution<a href="#_ftn9"
name="_ftnref9" style="font-size:8pt"  title=""><sup>[9]</sup></a>
(which contains the nationality restrictions for public utilities) does not
distinguish among classes of stock.  The Constitution applies its foreign owner&#173;ship limitation
on the corporation's &#147;capital,&#148; without distinc&#173;tion as to classes of shares.  </p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(b)        Similarly, in defining &#147;outstanding capital
stock,&#148; Section 137 of the Corporation Code<a href="#_ftn10" name="_ftnref10" style="font-size:8pt"
title=""><sup>[10]</sup></a>
<u>also</u> does not distinguish between common and preferred shares, nor does
it exclude either class of shares, in determining the outstanding capital stock
(the &#147;capital&#148;) of a corporation.  </p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  cellpadding=0 cellspacing=0>
 <tr>
 <td  height=33 style='vertical-align:top'>



 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 13 of 18</p>
 </div>
 <p style="margin-top:0;margin-bottom:0">

 &nbsp;</td>
 </tr>
</table></center></div>

(c)        The
deliberations of the Constitutional Commission<a href="#_ftn11" name="_ftnref11" style="font-size:8pt"
title=""><sup>[11]</sup></a>
(which drafted the present Constitution) confirm the foregoing view.  When the
Commission was deciding on the basis for computing the foreign equity limits for
nationalized activities under the Constitution (including the operation of
public utilities), among the concepts (and potential bases for the computation)
proposed and discussed were &#147;voting stock&#148; and &#147;controlling interest.&#148;  However,
the deliberations show that the Constitutional Commission ultimately rejected
those proposals and, instead, purposely chose to use the term &#147;capital.&#148;
Therefore, there is no doubt that the Constitutional Commission intended for
both common and preferred shares to be considered and counted in determining
compliance with nationality restrictions for the ownership of the capital stock
of public utilities.</p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(d)        The SEC--the government agency primarily
responsible for implementing the Corporation Code, and which is also
responsible for ensuring compliance with the Constitution&#146;s foreign equity
restrictions as regards nationalized activities<a href="#_ftn12"
name="_ftnref12" style="font-size:8pt"  title=""><sup>[12]</sup></a>--has categorically ruled that both common
and non-voting preferred shares should be counted for purposes of computing the
60-40% Filipino-alien equity requirement for certain economic activities under
the Constitution (see SEC Opinions dated April 14, 1987<a href="#_ftn13"
name="_ftnref13" style="font-size:8pt"  title=""><sup>[13]</sup></a> and December 27, 1995<a href="#_ftn14"
name="_ftnref14" style="font-size:8pt"  title=""><sup>[14]</sup></a>).  Thus, the SEC has likewise held that
foreigners can validly own more than 40% of the common shares but not more than
40% of the total outstanding capital stock which would include both common and
non-voting preferred shares for purposes of Article XII, Section 11 of the
Constitution (SEC Opinion dated February 15, 1988<a href="#_ftn15"
name="_ftnref15" style="font-size:8pt"  title=""><sup>[15]</sup></a>).  In these rulings, the SEC categorically
said that the term &#147;capital&#148; as used in the Constitution means the sum total of
the shares subscribed and paid by the shareholders, irrespective of their
nomenclature or the shares&#146; classification as common or preferred. </p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">3.         <u>The
levels of PLDT&#146;s foreign equity did not, and still do not, exceed the
Constitution&#146;s 40% foreign ownership limits for public utilities</u>.    </p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(a)        Upon the implementation of the resolutions
approved at the December 10, 1999 special meeting of PLDT&#146;s stockholders, PLDT&#146;s
foreign equity comprised only approximately 12.52% of PLDT&#146;s total outstanding
capital stock (<i>i.e.</i>, common and preferred shares).</p>

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

<p style='margin-left:36.0pt' style="margin-top:0;margin-bottom:0">In this connection, Smart&#146;s filings with the SEC
indicate that, when PLDT acquired Smart&#146;s entire capital stock, Smart itself
was at least 60% Filipino-owned.  Therefore, PLDT&#146;s acquisition of Smart did
not breach the 40% foreign ownership restriction for public utilities.</p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(b)        PLDT&#146;s latest Form 20-F indicates that, as of May
31, 2006, approximately 86.31% of PLDT&#146;s outstanding capital stock was
registered in the names of Philippine persons.  </p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  cellpadding=0 cellspacing=0 align=left>
 <tr>
 <td  height=264></td>
 </tr>
 <tr>
 <td></td>
 <td  height=34 style='vertical-align:top'>



 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 14 of 18</p>
 </div>
 <p style="margin-top:0;margin-bottom:0">

 &nbsp;</td>
 </tr>
</table></center></div>

&nbsp;</p>

<br clear=ALL>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(c)        The shareholding levels of certain holders of
PLDT common stock as of April 17, 2006, in relation to PLDT&#146;s total outstanding
capital stock, were as follows:</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' 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=1 cellspacing=0 cellpadding=0  style='width:429.85pt;margin-left:17.4pt;border-collapse:collapse;border:none'>

 <tr>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Name of Holder of </b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>PLDT Common Stock</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Nationality</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>Number of PLDT Common
 Shares Held</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>as of April 17, 2006</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>% to Total Outstanding
 Common Stock</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>as of April 17, 2006</b></p>
 </td>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;background:silver;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>% to Total Outstanding
 PLDT Shares</b></p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>as of April 17, 2006</b></p>
 </td>
 </tr>

 <tr>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:6.0pt' style="margin-top:0;margin-bottom:0">PCDNominee Corporation<a
 href="#_ftn16" name="_ftnref16" style="font-size:8pt"  title=""><sup>[16]</sup></a></p>
 </td>
 <td  valign=top style=' border-top:none;border-left:none;
 border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Various</p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Filipino</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">57,032,281</p>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">14,709,436</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">39.54%</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">8.0%  </p>
 <p style="margin-top:0;margin-bottom:0"> [The
 % held by the &#147;various&#148; holders is 6.36%.]</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:6.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">J.P.
 Morgan Hong Kong Nominees Limited</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:none;
 border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Hong Kong</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">29,918,502</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">16.49%</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">3.34%</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:6.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">PTIC</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:none;
 border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Filipino</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">26,034,263</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">14.35%</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">2.9%</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:6.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">MPRI</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:none;
 border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Filipino</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">17,112,534</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">9.43%</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">1.91%</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:6.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">NTT</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:none;
 border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Japanese</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">12,633,487</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">6.96%</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">1.41%</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:6.0pt;text-align:justify;text-justify:
 inter-ideograph' style="margin-top:0;margin-bottom:0">NTT
 DoCoMo, Inc.</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:none;
 border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Japanese</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">12,633,486</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">6.96%</p>
 </td>
 <td  valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">1.41%</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:18.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">Therefore, even if the Filipino nationality of PCD Nominee
Corporation were to be ignored, and the PLDT common stock that PCD Nominee
Corporation considers that it holds beneficially for its &#147;various&#148; (foreign)
clients were to be deemed held by a foreign shareholder<a href="#_ftn17"
name="_ftnref17" style="font-size:8pt"  title=""><sup>[17]</sup></a> still, when this is added to the holdings
of J.P. Morgan Hong Kong Nominees Limited, NTT, and DoCoMo as of April 17,
2006, only 12.52% of PLDT&#146;s total outstanding capital stock as of April 17,
2006 may be considered held by non-Filipinos.<a href="#_ftn18" name="_ftnref18" style="font-size:8pt"
title=""><sup>[18]</sup></a>
</p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(d)        In PLDT&#146;s September 6, 2006 Foreign Ownership
Monitoring Report to the PSE, PLDT advised that as of August 31, 2006, the
total outstanding PLDT shares (common and preferred) amounted to 896,171,539
shares.  Thus, the total number of PLDT shares that are allowed to foreigners
is 358,468,615 shares (40% of 896,171,539 shares).  However, the total number
of PLDT shares owned by foreigners as of August 31, 2006 was only 123,349,287
shares.  This is comprises only approximately 13.76% of PLDT&#146;s total
outstanding capital stock and is less than half the 40% allowed to foreigners.</p>

<p style='margin-left:18.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">Therefore, PLDT&#146;s shareholding structure complies with the
Constitution&#146;s nationality restrictions for public utilities.</p>

<p style='margin-left:18.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  cellpadding=0 cellspacing=0>
 <tr>
 <td  height=33 style='vertical-align:top'>



 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 15 of 18</p>
 </div>
 <p style="margin-top:0;margin-bottom:0">

 &nbsp;</td>
 </tr>
</table></center></div>

4.         <u>Even
shares denominated as non-voting have voting rights</u>.  There appears to be a
misconception that only holders of common shares have voting rights and so only
those holders can exercise control over a corporation; consequently, under this
view, only common shares should be considered in determining compliance with
nationality restrictions under the Constitution.   </p>

<p style='margin-left:18.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">But
this is wrong because Section 6 of the Corporation Code grants voting rights to
holders of shares of a corporation on certain fundamental corporate matters<a
href="#_ftn19" name="_ftnref19" style="font-size:8pt"  title=""><sup>[19]</sup></a>--<i><u>notwithstanding</u></i><u> their
classification in the corporation&#146;s articles of incorporation as non-voting</u>.
Thus, although only holders of PLDT common shares can elect the company&#146;s
directors, they clearly do not have a monopoly over the exercise of &#147;control&#148;
over a corporation/public utility.  It is therefore not surprising that <u>the
SEC in its Opinion dated April 14, 1987<a href="#_ftn20" name="_ftnref20"
title=""><u>[20]</u></a>
said that even preferred non-voting shares should be included in the
computation of the 60%-40% Filipino-foreign equity requirement, precisely
because they are entitled to vote on the most important and fundamental
corporate matters.</u></p>

<p style='margin-left:18.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">5.         <u>Foreign
equity is determined by direct/record ownership of shares</u>.</p>

<p style='margin-left:18.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:18.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:18.0pt' style="margin-top:0;margin-bottom:0">PLDT&#146;s Annual Report and Form 20-F both disclose the
following:</p>

<p style='margin-left:18.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:72.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
First
Pacific is the beneficial owner of the PLDT common shares held by PTIC<a
href="#_ftn21" name="_ftnref21" style="font-size:8pt"  title=""><sup>[21]</sup></a> and MPRI.</p>

<p style='margin-left:72.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:72.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
First
Pacific has an economic interest of at least 24%<a href="#_ftn22"
name="_ftnref22" style="font-size:8pt"  title=""><sup>[22]</sup></a> and a voting interest of at least 30%<a
href="#_ftn23" name="_ftnref23" style="font-size:8pt"  title=""><sup>[23]</sup></a> in PLDT based on the PLDT common
shareholdings of PTIC, MPRI, Larouge, and Semilion Enterprises, Inc.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">This
disclosure notwithstanding, the PLDT common shares held by PTIC and MPRI may <u>not</u>
be considered foreign-owned.  </p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(a)      PTIC and MPRI were both incorporated under the
Corporation Code and exist under Philippine law, and so are domestic
corporations.</p>

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

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">(b)      More importantly, 60% of the shares in both PTIC
and MPRI are held and owned of record by Philippine nationals<a href="#_ftn24"
name="_ftnref24" style="font-size:8pt"  title=""><sup>[24]</sup></a>, and both the Constitution and the law
express the limitation on foreign ownership of nationalized businesses in terms
of <u>ownership</u><i> </i>of shares<i>, </i>and <u>not</u><i> </i>of
&#147;beneficial ownership&#148; or of <i>&#147;</i>indirect&#148; or &#147;economic interest.&#148;  The SEC
made that same declaration in its March 23, 1993 opinion.<a href="#_ftn25"
name="_ftnref25" style="font-size:8pt"  title=""><sup>[25]</sup></a></p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  cellpadding=0 cellspacing=0 align=left>
 <tr>
 <td  height=262></td>
 </tr>
 <tr>
 <td></td>
 <td  height=34 style='vertical-align:top'>



 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 16 of 18</p>
 </div>
 <p style="margin-top:0;margin-bottom:0">

 &nbsp;</td>
 </tr>
</table></center></div>

&nbsp;</p>

<br clear=ALL>

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:72.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">In determining the nationality of corporations with foreign
equity, <u>the Commission En Banc, on the basis of the opinion of the
Department of Justice No. 18, s. 1989, dated January 19, 1989, voted and
decided to do away with the strict application/ computation of the so called
&#147;grandfather rule</u>&#148; (Re: Far Southeast Gold Resources, Inc. FSEGRI), and
instead applied the so called &#147;control test&#148; method of determining corporate
nationality.  The method as applied in the said case states as follows:</p>

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

<p style='margin-top:0pt;margin-right:72.0pt;margin-bottom:
0pt;margin-left:108.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">
&#147;<u>Shares belonging to corporations or partnerships at least 60% of the
capital of which is owned by Filipino citizens shall be considered as of
Philippine nationality</u>...&#148;  (Underscoring supplied, Justice Opinion dated
January 19, 1989)</p>

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

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:72.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0"><u>Applying the above-ruling to the instant case, MEI, which is
60% Filipino owned is considered a Filipino company.  Consequently, its
investment in MMDC is considered that of a Filipino</u>.  Therefore, the 60% Filipino
equity requirement for mining companies would still be met by MMDC ***. </p>

<p style='margin-top:0pt;margin-right:36.0pt;margin-bottom:
0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">Accordingly, corporations such as PTIC and MPRI<a
href="#_ftn26" name="_ftnref26" style="font-size:8pt"  title=""><sup>[26]</sup></a> need only to be at least 60%
Filipino-owned in order for <u>all</u> shares of stock belonging to them to be
considered of Philippine nationality.  Consequently, by the foregoing standard
(<i>i.e.</i>, the &#147;control test&#148; rather than the discarded grandfather rule),
PTIC and MPRI are clearly Philippine nationals.  Thus, their equity in PLDT
should and is properly considered as belonging to Philippine nationals.<a
href="#_ftn27" name="_ftnref27" style="font-size:8pt"  title=""><sup>[27]</sup></a></p>

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

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><b>C.        The courts have
upheld PLDT&#146;s position and shareholding structure.</b></p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">            In closing,
we note that the issue you have raised regarding the correct basis for
determining foreign equity levels in PLDT (<i>i.e</i>., whether or not only
common shares or the company&#146;s entire outstanding capital stock should be
considered) and, by extension, the company&#146;s compliance with the Constitutional
nationality restrictions, has already been raised before Philippine courts and
this issue has already been resolved in the manner we have explained above.  </p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">        </p>

<p style='margin-bottom:0pt;margin-bottom:.0001pt;
text-align:justify;text-justify:inter-ideograph;text-indent:36.0pt' style="margin-top:0;margin-bottom:0">

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  cellpadding=0 cellspacing=0>
 <tr>
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Atty. Victor
C. Fernandez filed SEC Case No. 01863<a href="#_ftn28" name="_ftnref28" style="font-size:8pt"  title=""><sup>[28]</sup></a> in
December 1999 against the then-PLDT Board to annul the aforementioned PLDT
stockholder resolutions passed on December 10, 1999 and approving the issuance
of PLDT common shares to (a) Smart&#146;s erstwhile
stockholders as consideration and in exchange for PLDT&#146;s acquisition of Smart&#146;s
entire issued capital stock and (b) NTT, for cash.  Among the petition&#146;s
grounds was that these issuances would supposedly result in PLDT&#146;s exceeding
the 40% foreign ownership restriction for public utilities because foreigners
would own more than 40% of PLDT&#146;s <i>common</i> stock.</p>

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">            The respondents-PLDT
directors, citing substantially the authorities cited in this letter, pointed
out that PLDT&#146;s common and preferred shares (that is, its entire shareholding
base, or &#147;capital&#148; to use the Constitution&#146;s term) should both be considered in
ascertaining compliance with the relevant nationality restrictions.  </p>

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

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">In
a February 21, 2003 decision, the Regional Trial
Court of Makati, Branch 142, upheld the PLDT Board and dismissed the petition.
The court also ruled, among others, that MPRI and PTIC were Philippine
nationals, and so their equity in PLDT should be considered Filipino
shareholdings. </p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-justify:inter-ideograph;
text-indent:36.0pt' style="margin-top:0;margin-bottom:0">These
rulings were affirmed by the Supreme Court when it dismissed Atty. Fernandez&#146;s
appeal.<a href="#_ftn29" name="_ftnref29" style="font-size:8pt"  title=""><sup>[29]</sup></a>  This
dismissal and, consequently, the Decision upholding PLDT&#146;s shareholding
structure as being in full compliance with the 40% foreign ownership limitation
have since become final and executory.</p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">            </p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">             We believe
we have addressed the issues you have raised. We therefore ask that you publish
both a retraction as well as the complete text of this letter with the same
prominence and regularity that you gave to your baseless assertions.</p>

<p style='margin-left:144.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:216.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0">Sincerely,</p>

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

<p style='margin-left:216.0pt;text-align:justify;text-justify:
inter-ideograph' style="margin-top:0;margin-bottom:0"><u>/s/
E. M. Lombos</u></p>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">                                                                        E.M.
Lombos</p>

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

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

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

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0">Cc: Corporate Secretary,
PLDT</p>

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

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

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

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

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 <div style='padding:3.6pt 7.2pt 3.6pt 7.2pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Page 18 of 18</p>
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<br
clear=all style='page-break-before:always'>
Signatures</p>

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

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

<br clear=ALL>

<p style="margin-top:0;margin-bottom:0">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.</p>

<p style='text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:36.0pt' 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:258.0pt;margin-left:167.4pt;border-collapse:collapse'>
 <tr>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">PHILIPPINE LONG DISTANCE</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">TELEPHONE COMPANY</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</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">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">By        :     <u>/s/ Ma. Lourdes C.
 Rausa-Chan</u></p>
 <p style="margin-top:0;margin-bottom:0">Name  :     Ma.
 Lourdes C. Rausa-Chan</p>
 <p style="margin-top:0;margin-bottom:0">Title     :     Senior
 Vice President, Corporate</p>
 <p style="margin-top:0;margin-bottom:0">                  Affairs
 and Legal Services Head </p>
 <p style="margin-top:0;margin-bottom:0">                  and
 Corporate Secretary</p>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0pt 5.4pt 0pt 5.4pt'>
 <p style='margin-left:42.6pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:216.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:216.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:216.0pt' 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:
September 14, 2006</p>

<p style='text-indent:36.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<div><br clear=all>

<hr align=left size=1 width="33%">

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref1"
name="_ftn1" style="font-size:8pt"  title=""><sup>[1]</sup></a>               A dissenting PLDT
stockholder could have exercised his appraisal rights in light of the amendment
to PLDT&#146;s Articles denying pre-emptive rights in respect of the share issuance
to NTT.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref2"
name="_ftn2" style="font-size:8pt"  title=""><sup>[2]</sup></a>               In this connection, it has
been suggested that PTIC and PHI should be dissolved to enable the government
to directly own PLDT shares.  This, in our view, is erroneous.  PTIC and PHI
presumably have creditors in addition to other shareholders.  Accordingly, even
if the corporations were already being liquidated, there is no basis at this
time for a PHI or PTIC shareholder (even if it is the government) to claim, or
to posit entitlement to, specific corporate assets such as PLDT shares.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref3"
name="_ftn3" style="font-size:8pt"  title=""><sup>[3]</sup></a>               A copy of this opinion was
annexed to the notice of meeting and proxy statement disseminated by PLDT for
the December 10, 1999 special stockholders&#146; meeting.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref4" name="_ftn4" style="font-size:8pt"  title=""><sup>[4]</sup></a>               The source of the alleged stockholding figures cited
in your fax is not clear to PLDT or to us.  </p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref5"
name="_ftn5" style="font-size:8pt"  title=""><sup>[5]</sup></a>               On page 6 of the Annual
Report, the &#147;[c]itizenship&#148; of the PCD Nominee Corporation was, as in PLDT&#146;s
Form 20-F, given as &#147;Philippine Corporation.&#148;  </p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref6"
name="_ftn6" style="font-size:8pt"  title=""><sup>[6]</sup></a>               This number is further
divided into 57,032,281 and 14,709,436 for &#147;various&#148; (foreign) and &#147;Filipino&#148;
clients, respectively, of PCD Nominee Corporation for whom it claims to hold
the shares beneficially. </p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref7"
name="_ftn7" style="font-size:8pt"  title=""><sup>[7]</sup></a>               The PLDT common shares
held by NTT totaled 25,266,973 (of which 12,633,486 NTT recently sold to
DoCoMo) from the 12,198,462 PLDT common shares issued to NTT pursuant to its
subscription for cash and 13,068,509 were issued in exchange for NTT&#146;s Smart
shares (NTT was among Smart&#146;s erstwhile shareholders from whom PLDT acquired
Smart).</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref8"
name="_ftn8" style="font-size:8pt"  title=""><sup>[8]</sup></a>               The Form 20-F has slight
discrepancies from the Annual Report because the SEC Form 17-A figures were as
of April 17, 2006, while the NYSE Form 20-F was as of May 31, 2006.  PLDT&#146;s
J.P. Morgan Hong Kong Nominees Limited accounts move depending on deposits/withdrawals
or lodgments/upliftments of common shares.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref9" name="_ftn9" style="font-size:8pt"  title=""><sup>[9]</sup></a>               Article XII, Section 11 provides: &#147;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 <u>at least sixty <i>percentum</i> of whose capital is owned by
such citizens</u>, nor shall such franchise, certificate or authorization be
exclusive in character or for a longer period than fifty years ***&#148;
(underscoring supplied).</p>

</div>

<div>

<p style='margin-right:0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref10" name="_ftn10" style="font-size:8pt"  title=""><sup>[10]</sup></a>
            Section 137 of the Corporation Code provides: &#147;Outstanding capital
stock defined. -- The term &#147;outstanding capital stock&#148;, as used in this Code,
means the <u>total shares of stock issued</u> under binding subscription
agreements to subscribers or stockholders, whether or not fully or partially
paid, except treasury shares&#148; (underscoring supplied).</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref11" name="_ftn11" style="font-size:8pt"  title=""><sup>[11]</sup></a>             See III Record of the Constitutional Commission, at
269, 326-327, 357, and 582.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref12"
name="_ftn12" style="font-size:8pt"  title=""><sup>[12]</sup></a>             See Corporation Code, secs.
143 and 17.  Section 17, in particular, authorizes the SEC to disapprove
amendments to a corporation&#146;s articles of incorporation (such as the amendments
to PLDT&#146;s Articles related to the resolutions passed during the December 10,
1999 special stockholders&#146; meeting) if it (the SEC) determines that &#147;the
percentage of ownership of the capital stock to be owned by citizens of the
Philippines has not been complied with as required by existing laws or the
Constitution.&#148;  Obviously, the SEC did not determine that those resolutions resulted
in a breach of the foreign equity restrictions for public utilities, because it
approved the amendments to PLDT&#146;s Articles on, among others, the increase of
its capital stock to P9.395 billion and the denial of pre-emptive rights
as regards the issuance of PLDT common shares to NTT.  </p>

</div>

<div>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><a
href="#_ftnref13" name="_ftn13" style="font-size:8pt"  title=""><sup>[13]</sup></a>             Addressed to Supreme
Technetronic Corporation.</p>

</div>

<div>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><a
href="#_ftnref14" name="_ftn14" style="font-size:8pt"  title=""><sup>[14]</sup></a>             Addressed to Joaquin Cunanan
&amp; Co.</p>

</div>

<div>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><a
href="#_ftnref15" name="_ftn15" style="font-size:8pt"  title=""><sup>[15]</sup></a>             Addressed to Atty. Felipe
Gozon.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref16"
name="_ftn16" style="font-size:8pt"  title=""><sup>[16]</sup></a>             On page 6 of the Annual
Report, the &#147;[c]itizenship&#148; of the PCD Nominee Corporation was, as in PLDT&#146;s
Form 20-F, given as &#147;Philippine Corporation.&#148;</p>

</div>

<div>

<p style="margin-top:0;margin-bottom:0"><a href="#_ftnref17" name="_ftn17" style="font-size:8pt"  title=""><sup>[17]</sup></a>             But see the discussion in
item 5 below.</p>

</div>

<div>

<p style="margin-top:0;margin-bottom:0"><a href="#_ftnref18" name="_ftn18" style="font-size:8pt"  title=""><sup>[18]</sup></a>             I.e., 6.36% plus 3.34% plus
1.41% plus 1.41%, respectively, or a total of 12.52%.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;text-justify:
inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref19" name="_ftn19" style="font-size:8pt"  title=""><sup>[19]</sup></a>             These matters are: (a) amendment of the articles of
incorporation; (b) adoption and amendment of by-laws; (c) sale, lease,
exchange, mortgage, pledge or other disposition of all or substantially all of
the corporate property; (d) incurring, creating or increasing bonded
indebtedness; (e) increase or decrease of capital stock; (f) merger or
consolidation of the corporation with another corporation or other
corporations; (g) investment of corporate funds in another corporation or
business; and (h) dissolution of the corporation.  </p>

</div>

<div>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><a
href="#_ftnref20" name="_ftn20" style="font-size:8pt"  title=""><sup>[20]</sup></a>             Addressed to Supreme
Technetronic Corporation.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref21"
name="_ftn21" style="font-size:8pt"  title=""><sup>[21]</sup></a>             With respect to PLDT shares
held by PTIC, only to the proportionate extent of Larouge&#146;s and MPAH&#146;s
ownership of PTIC.</p>

</div>

<div>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><a
href="#_ftnref22" name="_ftn22" style="font-size:8pt"  title=""><sup>[22]</sup></a>             24.22% as of April 17, 2006
and 24.76% as of May 31, 2006.</p>

</div>

<div>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><a
href="#_ftnref23" name="_ftn23" style="font-size:8pt"  title=""><sup>[23]</sup></a>             30.84% as of April 17, 2006
and 31.36% as of May 31, 2006.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref24"
name="_ftn24" style="font-size:8pt"  title=""><sup>[24]</sup></a>             See PTIC&#146;S and MPRI&#146;s latest
General Information Sheets submitted to the SEC.  </p>

</div>

<div>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><a
href="#_ftnref25" name="_ftn25" style="font-size:8pt"  title=""><sup>[25]</sup></a>             Addressed to Mr. Francis F. How of the
Natural Resources Development Corporation.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a
href="#_ftnref26" name="_ftn26" style="font-size:8pt"  title=""><sup>[26]</sup></a>             And PCD Nominee Corporation,
which as we have said is almost 100% owned by PDTC which is itself at least 60%
Filipino-owned.</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref27"
name="_ftn27" style="font-size:8pt"  title=""><sup>[27]</sup></a>
    But even if the PLDT common
shares held by PTIC (26,034,263 shares) and MPRI (17,112,534 shares) are to be
considered foreign owned, they held only 2.90% and 1.91%, respectively, of
PLDT&#146;s total outstanding capital stock as of April 17, 2006.  This would mean
that the foreign equity in PLDT based on its total outstanding capital stock as
of that day would be 18%, which would still be less than half of the maximum
40% allowed by the Constitution.]</p>

</div>

<div>

<p style='margin-left:36.0pt;text-align:justify;
text-justify:inter-ideograph;text-indent:-36.0pt' style="margin-top:0;margin-bottom:0"><a href="#_ftnref28"
name="_ftn28" style="font-size:8pt"  title=""><sup>[28]</sup></a>             Entitled &#147;Victor C. Fernandez
v. Antonio O. Cojuangco, et al.&#148;</p>

</div>

<div>

<p style='text-align:justify;text-justify:inter-ideograph' style="margin-top:0;margin-bottom:0"><a
href="#_ftnref29" name="_ftn29" style="font-size:8pt"  title=""><sup>[29]</sup></a>             In SC G.R. No. 157360.</p>

</div>

</div>

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