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Ayala Corporation’s consolidated net income in the first nine months of 2008 reached P7.8 billion, 43% lower than the same period last year on lower equity earnings and substantially lower capital gains. However, Ayala’s liquidity position remains strong with cash of P47 billion at the end of the first nine months of the year and net debt at its lowest in the past five years. It maintains a low gearing with net debt to equity ratio at 0.07 to 1.

Ayala chairman and CEO Jaime Augusto Zobel de Ayala said, “Our efforts to aggressively reduce debt levels and lengthen our maturities at the holding company level, coupled with the value realization initiatives we have undertaken the past two years, have allowed us to take advantage of the favorable market conditions last year and significantly strengthen our financial position. These efforts have given us both strength and flexibility in the face of the on-going external shocks and volatility in the market. The treasury and funding strategies we have undertaken in past years have sufficiently mitigated fund sourcing risks, and have given us the flexibility to pursue our growth platforms.”

Earnings of Ayala’s operating units were muted in the first nine months, with mainly the property and water distribution businesses registering double-digit growth.

Ayala’s property unit posted a 23% growth in net income to P3.8 billion with a 37% expansion in revenues underpinned by sustained demand for its residential projects, particularly the middle income and affordable residential brands. Sales of Alveo rose by 29% while Avida’s increased by 45%, offsetting the slight decline on its high-end Ayala Land Premier brand. Demand for middle-income and affordable residential products, particularly from overseas-based Filipinos, remained robust in the first nine months, making up 70% of sales to this market. Ayala Land’s revenues from its Shopping Centers were flat, while revenues from its Corporate Business declined by 15% in the absence of lot sales this year, despite growing revenues from its BPO and headquarter buildings. While overall margins were under pressure from rising construction costs, Ayala Land posted an 11% growth in net operating income.

Ayala’s banking unit, Bank of the Philippine Islands saw its core business resilient amidst the volatility in the financial markets. Its net loans grew by 21% in the first nine months, with all market segments posting double-digit growth. The bank’s remittance volume was up 38%, surpassing industry’s 17% growth and despite the expansion in loans, the bank’s NPL ratio improved to 3.3% by the end of September, better than industry’s 3.9%. BPI does not have any collateralized debt obligation in its books and has no direct exposure to any major US investment bank. It is well capitalized with risk-adjusted CAR at 13.2%. The bank announced plans to issue P10 to P15 billion of Tier 2 capital to further strengthen its capital base and position itself for possible acquisition opportunities. However, due mainly to the absence of securities trading gains, revenues contracted by 9% which put net income at P5.3 billion, 30% lower than the prior year.

Telecom unit Globe posted steady revenues although wireless subscriber base grew by 24%, putting total wireless subscribers at 23.7 million. Wireless revenues slipped by 2% as consumers tempered usage. This was offset by a 5% growth in its wireline revenues, which was driven by the broadband and corporate data businesses. Globe introduced a prepaid version of Visibility, its fully mobile internet service, resulting in broadband subscriber growth of 51% year-on-year. Globe’s WiMax service is also expected to boost broadband revenues with roll-out on track. EBITDA margins remained healthy at 61% but lower than last year’s driven by an 8% increase in operating expenses and subsidy. Net income reached P8.8 billion, 9% lower year-on-year as reductions in interest expense in 2008 coupled with non-recurring charges related to the bond prepayment in 2007, helped offset the impact of the lower operating earnings.

Ayala’s portfolio of companies under AC Capital contributed P125 million in equity earnings driven largely by its water distribution business, Manila Water Company. Manila Water registered a 13% growth in net earnings as operating efficiencies continued to improve. Its capital investments resulted in new connections, thus adding to the sustained growth in billed volume, while system losses were brought down to only 20.2% from 25% at the beginning of the year. Manila Water continues to pursue its projects to improve and expand its network, and has intensified its efforts to implement sewerage and sanitation programs. The Company is also looking at other water and wastewater projects outside of its current concession area. Earlier, it completed a highly successful peso bond issue which raised a total of P4.0 billion for the company.

The company’s electronics subsidiary, Integrated Microelectronics, Inc. saw an 11% growth in revenues fuelled by higher sales volumes from key customers. The company, however, registered a net loss of P373 million in the first nine months due to a one-time loss incurred in the second quarter of this year from currency hedging-related transactions. Excluding these losses, however, IMI’s underlying business remained strong, as earnings would have grown by 15% year-on-year.

Ayala’s direct investments in the business process outsourcing space continue to ramp up. The company recently announced it will pursue a tender offer, together with Providence Equity Partners, to acquire up to 100% of the outstanding common shares of eTelecare. eTelecare provided guidance of US$9-US$11 million in net income in 2008. Ayala remains positive in the long term growth prospects of the BPO industry. While the current global economic slowdown may impact volumes in the interim, there remains an overall global trend to cut cost and favor outsourcing alternatives.

“The impending slowdown in global economic growth coupled with inflation pressures on basic goods in recent months have had a dampening effect on consumer spending. This, to some extent, has impacted topline growth of some of our key businesses,” said Ayala Corporation President Fernando Zobel de Ayala. “But despite the prevailing challenges, each of our business units remains fundamentally sound, with sufficient liquidity and capitalization to keep them on track with their respective growth plans moving forward.”

Ayala Corporation’s net income in the second quarter of 2008 reached P3.7 billion, 38% higher than previous quarter’s net income of P2.7 billion, but 38% lower than net income in the second quarter of 2007. Net income for the first half reached P6.3 billion, 45% lower than the P11.5 billion in the same period last year. Lower earnings during the period were attributed mainly to significantly lower capital gains and lower equity earnings from its key operating units.

Ayala booked P2.7 billion in capital gains from the sale of 3.8 million common shares in Globe. The gains realized were substantially lower than the P7-billion gain booked in the first half of last year. Equity earnings from operating units declined by 23% as net income of certain operating units softened amidst a more challenging economic environment.

“The pressures of rising oil and commodity prices and tightening credit globally have created a much more challenging operating environment,” said Ayala president and chief operating officer Fernando Zobel de Ayala. “electronarnings have been under some pressure this year, we continue to see strong underlying demand in each of our key businesses, particularly in real estate, consumer and corporate loans, telecom services, auto sales, and electronics.”

Ayala Land reported a 37% growth in net income with consolidated revenues up 25% year-on-year buoyed by the sustained growth of its residential and construction businesses. Its strategic landbank management, corporate business, and operations in Visayas and Mindanao also contributed to revenue improvement. ALI’s residential development revenues grew by 12% with unit take-up during the period up by 13% versus the same period last year. Its shopping center revenues remained stable while corporate business revenues registered 8% growth. Ayala Land spent about P7.9 billion in capital expenditure in the first half, 14% higher than in the first half of 2007. The company expects to substantially catch up with its capital expenditure program in the second half of the year.

Its banking unit, Bank of the Philippine Islands (BPI), recently reported net income in the second quarter of P2.3 billion, exceeding first quarter net income of P1.5 billion. However, net income in the first half of the year of P3.8 billion was 33% lower than the P5.7 billion recorded in the first semester of 2007. Margins and securities trading income were tighter amidst a rising interest rate environment which resulted in a 6% drop in net interest income and a 22% decline in non-interest income. Lower operating expenses, however, partly cushioned the revenue shortfall. Loan growth was resilient, expanding by 16% driven by consumer lending, particularly, retail mortgage, credit cards, and auto loans, which rose by 28%, 22% and 17%, respectively. Demand for credit was equally strong from large corporates and SMEs. BPI continued to lead in the remittance business and was awarded for the third straight year by the Bangko Sentral ng Pilipinas as the Top Commercial Bank for OFW Remittances for 2007.

Telecom unit Globe reported a 3% decline in net income in the first half. Consolidated service revenues slipped by 2% due mainly to lower wireless service revenues mitigated by a 5% increase in wireline revenues. The changing pattern in consumer spending tempered revenue growth particularly for voice and value-added services, indicating the shift in consumers’ preference for lower-cost alternatives such as SMS. Overall demand, however, for wireless communications was strong as Globe’s subscriber base expanded by 25% year-on-year, with the highest net adds of 1.5 million achieved in the second quarter. Despite an 11% increase in operating expenses, consolidated EBITDA margins remained high during the period at 62%. Improvements in revenue growth are expected in the second half as key initiatives are in place to focus on priority segments, support a more aggressive broadband roll out, and develop new growth areas. Globe also announced a special cash dividend of P50 per share to its shareholders putting total dividends this year to P125 per share, on top of the regular cash dividend of P37.50.

Equity earnings from companies under AC Capital were lower this year mainly due to a decline in earnings of Ayala Automotive Holdings Corporation, international arm AG Holdings, and one-time loss provisions at Integrated Microelectronics, Inc. (IMI). Double-digit earnings growth of Manila Water, however, partly cushioned the earnings shortfall.

Manila Water reported a 21% increase in net income in the first half of the year to P1.4 billion from P1.1 billion the prior year. Its continued focus on its capital investment plan has allowed it to consistently improve operating efficiencies. Non-revenue water declined to 20% with billed volume up 6%. MWC added 25,000 new service connections during the period in expansion areas within the East Zone. The company continues to explore opportunities beyond its concession zone. It recently signed a contract for technical consulting services with the Boracay Water and Sewerage System and was also awarded a 5-year management contract for a non-revenue water reduction project with the Saigon Water Company in Vietnam.

IMI registered a net loss of US$16 million due mainly to currency hedging-related transactions which were all fully unwound as of the end of June. Revenue growth, however, remained strong and was up 14% year-on-year due to higher volumes from its key customers. Excluding losses from the currency hedging contracts, IMI’s net income would have been up 31% year-on-year. IMI’s business prospects remain strong and the company is continuing to explore opportunities to expand its geographic footprint and enhance its capabilities through value-adding acquisitions.

Ayala’s BPO investee companies continued to generate positive performance despite tougher economic conditions. Listed customer care company eTelecare will be announcing its second quarter earnings results on August 13 (5pm US Eastern time). When it released its first quarter results last May, it provided guidance of Q208 revenues of US$72-74 million (up 18%) and net income of US$1.5-2.1 million.

Its unlisted BPO unit, Integreon, completed its acquisition of a New York-based eDiscovery company, Datum, Inc., pushing revenues up 44%, post-acquisition, and 38% on a stand-alone basis. Margins improved significantly both at the gross profit and EBITDA levels on the back of favorable foreign exchange rates and Datum’s strong performance. In the meantime, graphics and creative design outsourcer Affinity Express made major customer acquisition wins last quarter, which are ramping up to full volumes.

Ayala chairman and CEO Jaime Augusto Zobel de Ayala said, “We expect operating conditions to remain challenging for the balance of this year and perhaps into early next year as we continue to feel the pressure from higher inflation and interest rates. However, we believe the fundamentals of each of our businesses remains solid and we are optimistic that as global markets adjust and normalize, we are well-positioned, given the group’s scale and financial and market strengths, to achieve our growth targets and value creation objectives.”

The above statement refers to the disclosure submitted to the PSE and SEC today, August 11, 2008, by Rufino Luis T. Manotok, Ayala CFO and senior managing director for strategic planning.

Ayala Corporation is the Philippines’ best managed company, according to FinanceAsia, a regional magazine on Asian financial markets.

In its eighth annual poll of Asia’s top companies among 167 institutional investors and equity analysts in the region, FinanceAsia also cited Ayala as best in corporate governance and third best in investor relations and strong dividend policy among blue-chip Philippine companies.

Globe chief finance officer Delfin Gonzalez, Jr. was once again named best CFO, followed by Ayala treasurer Ramon G. Opulencia.

Listed Ayala companies figured prominently in all categories. Globe Telecom ranked second among the best managed companies in the country while Ayala Land, Inc. (ALI) and Manila Water Company shared seventh place. Globe, ALI, and Bank of the Philippine Islands (BPI) also ranked high in the corporate governance, investor relations, and strong-dividend policy categories.

Manila Water was named second best company with mid-sized capitalization, after ICTSI. Cebu Property Ventures and Development Corporation, a unit of Cebu Holdings, Inc., ranked similarly in the small-capitalization category, following Splash Corporation. Other companies mentioned in the FinanceAsia survey include SM Investments, PLDT, Megaworld, Jollibee Foods, San Miguel, and Meralco.

Ayala’s strong performance in the FinanceAsia poll comes on the heels of the Wall Street Journal’s Asia’s Most Admired Companies list where the conglomerate ranked first in long-term vision and corporate reputation and 3rd most admired company in the Philippines. Earlier in the year, Ayala, Globe, BPI, and ALI obtained four of the five top rankings of the Institute of Corporate Directors’ 2007 Corporate Governance Scorecard Project. Ayala also ranked first in the category “Best for Responsibilities of Management and Board of Directors’ among Philippine companies in AsiaMoney’s Corporate Governance Poll.

Manila Water Company announced that it has been engaged by the Philippine Tourism Authority (PTA) to devise, implement and monitor management plans that will improve the operations of the Boracay Water and Sewerage System (BWSS).

Department of Tourism Secretary and concurrent PTA general manager Joseph Ace H. Durano today signed the contract for management services with Manila Water to help address growing environmental concerns particularly on water supply and wastewater treatment in Boracay Island, a popular tourist destination. BWSS operates a water treatment plant in mainland Caticlan and a sewage treatment plant on the island.

“As wastewater disposal and treatment have become a major concern, we would like to further help the government’s programs on environmental protection by doing what we can to help preserve Boracay as one of the country’s major tourist destinations,” said Manila Water president Antonino T. Aquino. “This private-public partnership also provides us the opportunity to support the government’s thrusts in tourism as a major vehicle for economic development.”

Manila Water took over the operations of the East Zone concession of the Metropolitan Waterworks and Sewerage System in 1997 as part of the government’s biggest privatization project. It was listed in the Philippine Stock Exchange in 2005. Today, Manila Water provides water and wastewater services to nearly six million people in 23 cities and municipalities of the east zone concession of Metro Manila. It operates and manages the country’s biggest sewage treatment facility in Makati, and the largest and most modern septage treatment facility in Southeast Asia, located in Taguig City. Manila Water also operates and manages a water supply and sewerage project in Tirupur, India.

Integreon, a global leader in corporate, legal and financial complex knowledge process outsourcing (KPO), held a ceremony on Wednesday, January 30, to launch its new office in Makati City, Philippines.

The launch, held at the 6750 Office Tower on Ayala Avenue, was led by Jaime Augusto Zobel de Ayala, chairman and chief executive officer of Ayala Corporation. In October 2006, LiveIt Solutions Inc., Ayala group’s investment arm for business process outsourcing, and Integreon announced a management-led buyout transaction that resulted in a majority stake for LiveIt.

Also present were Fred Ayala, LiveIt CEO; Liam Brown, Integreon President and CEO; and Erik Joseph Tabuena, Integreon Philippines Country Manager.

In his keynote address, Zobel cited the Philippines’ capacity to become a “powerhouse” in knowledge process services and stated that, “The Ayala group is convinced that the time is right for the Philippines to re-position itself to become a leading global provider of outsourced high-value, professional services.”

“Our greatest asset is that Filipinos are well-educated and have an excellent ability to operate successfully across both multiple cultures and knowledge domains,” he stressed.

Zobel noted that globally competitive business organizations are investing heavily to enable their workforce to manage knowledge and to be more productive. In the US alone, there are an estimated 48 million knowledge workers out of its total 137 million workers. The value that can be attained even with a one-percent gain in total productivity by its knowledge workers is substantial, he noted.”The Philippines is well-positioned to gain a significant share of outsourcing serving knowledge-intensive businesses. I expect to see rapid KPO growth here.” he stated.

Fred Ayala, LiveIt Solutions’ chief executive officer, said that Integreon has a strong track record in delivering the highest levels of quality outsourcing services for the world’s top legal and financial firms. Integreon’s customers include six of the ten largest global investment banks, two of three largest global law firms, many Fortune 100 and FTSE 100 corporations, several top private equity firms and hedge funds. Integreon’s services enable its corporate clients to spend more time on high-value work such as strategy and competence enhancement.

“The entry of Integreon into the Philippines marks a breakthrough for the country into the high value add and rapidly growing KPO and LPO (Legal Process Outsourcing) sectors. For Integreon, the opening of our new Philippine operation will enable it to expand its geographic footprint, gain access to a large new pool of skilled managers and professionals, and enhance Business Continuity Planning capabilities,” Ayala said.

Liam Brown, Integreon’s CEO, added that Integreon, which has offices in New York, Mumbai, Delhi, London and North Dakota, has long viewed Manila as a potential strategic delivery site. Its relationship with Ayala Corp. brings a host of advantages from recruitment to commercial real estate procurement.

“The quality and abundance of talent as well as the affinity for US legal and financial frameworks are definite advantages in locating here” Brown stated, adding that, among popular offshore destinations, the Philippines offers the highest percent of graduates who are suitable for knowledge intensive tasks.

According to Brown, Integreon’s presence in the Philippines enhances the firm’s ability to seize opportunities in the Offshore Legal Services sector, which is expected to grow to nearly $500 million; E-Discovery, which involves the process of securing electronic data for litigation purposes and which is expected to grow to $3.4 billion within five yeas; as well as in Offshoring Research and Analytics in banking and financial services, which is projected to grow to $620 million within five years.

Founded in 1998, Integreon is a pioneer in the KPO and LPO sectors, and was named last year as the world’s leading provider of Research and Analytics outsourcing for the second year running, and the world’s leading provider of Legal Document outsourcing in the fourth annual “Black Book of Outsourcing” which is the Brown Wilson Group’s prestigious annual survey of outsourcing vendors and advisors.

About Integreon
Integreon provides knowledge support services such as research and analytics, electronic discovery and litigation document review, accounting, and document and graphic services, which enable professionals to focus their time and energy on their “highest and best use”. Clients include leading financial services institutions, major international law firms, and Global 2000 corporations. For more information about Integreon, please visit www.integreon.com.

About LiveIt
LiveIt Solutions, Inc. is the holding company for Ayala Corporation’s investments in business process outsourcing. It owns significant stakes eTelecare, Affinity Express, and Integreon. Founded in 1834, Ayala Corporation is the oldest business house in the Philippines and one of the largest conglomerates in the country. Ayala and its listed subsidiaries have a combined market capitalization of approximately $20 billion.

Ayala Corporation and its listed companies, Ayala Land, Inc., Bank of the Philippine Islands, and Globe Telecom, earned four of the five highest rankings of the 2007 Corporate Governance Scorecard Project conducted by the Institute of Corporate Directors (ICD).

A total of 138 companies, or more than half of the 249 companies listed in the Philippine Stock Exchange, participated in the ICD study, which was for the first time undertaken jointly with the PSE, Securities and Exchange Commission, and Ateneo Law School, and supported by the Center for International Private Enterprise. The top five rankings, which also included PLDT, were announced at the PSE Awards Night held on January 8 at the InterContinental Manila.

ICD is a professional, non-government organization that conducts training and advocacy for corporate governance and citizenship. It has been at the forefront of promoting corporate governance reforms in the country and has developed a corporate governance scorecard, a tool that public corporations can use to rate and benchmark their corporate governance practices relative to global and regional standards.

The CG Scorecard Project is envisioned to provide empirical data on the state of corporate governance among Philippine companies, help publicly listed companies strengthen their governance structures, and assist the SEC in reviewing principles for possible adoption by publicly listed companies. The scorecard is used to evaluate practices in the areas of shareholder rights, equitable treatment of shareholders, role of stakeholders in governance, disclosure and transparency, and board responsibilities key governance principles established by the Organisation for Economic Cooperation and Development and used as basis for corporate governance practices globally.

Led by the parent company, Ayala group companies assessed their own governance practices using ICD’s scorecard and submitted supporting documents including the latest annual report, manual of corporate governance, code of conduct, amended articles and by-laws, as well as information on stockholders’ meeting, public ownership, board attendance, and ethical standards. Accomplished scorecards from all companies were validated and analyzed within or outside the SEC in coordination with ICD. Students from the Ateneo Law School also helped verify the survey results against publicly disclosed information.

Manila Water recently received the International Finance Corporation’s Client Leadership Award in recognition of the company’s comprehensive approach in promoting sustainable development in the East Zone of Metro Manila and in the water and wastewater industry. Manila Water is the first Philippine company to receive this global award which is given annually. The awardee is selected after undergoing a rigorous selection process among IFC’s clients globally.

IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s Client Leadership Award is a significant award as it recognizes highly successful corporate clients that significantly help IFC’s sustainability mission. Manila Water was given the award as the Company demonstrated strong management commitment to environmental and social sustainability and corporate governance while achieving commercial success.

“IFC has been a valuable partner in helping us prove that business objectives and sustainability initiatives are perfectly aligned, which is the core of our business strategy. We are honored to receive this award and proud of our longstanding partnership with IFC. We hope to continue this valuable relationship with IFC as we continue to grow our business,” said Manila Water president Antonino Aquino.

At the award ceremony in Washington, DC, IFC executive vice president and CEO Lars Thunell, said, “Manila Water’s innovative programs to bring water to poor people and its success in supplying the city’s eastern zone are just some of the ways that the company embodies IFC’s ideals in social sustainability and corporate governance.”

Globe Telecom posted a strong net income of P3.5 billion in the first quarter of 2006, flowing from its highest-ever quarterly EBITDA and EBIT of P9.7 billion and P5.7 billion, respectively. These results build on the momentum that started in the second half of 2005 when Globe introduced various compelling value-offers to its subscribers. They also reflect continuing efforts to manage the company’s cost of operations.

Globe’s first-quarter net income of P3.5 billion is up 19 percent from last year, despite the tripling of provisions for income tax year on year to P1.5 billion. The company’s effective income tax rate increased from 15 percent to 31 percent with higher corporate-tax rates and the expiry of the Globe’s tax holiday in March 2005. If the impact of mark-to-market and forex changes were to be excluded, the first quarter net income would be up 40 percent year on year and 19 percent quarter on quarter.

Net service revenues at P14.2 billion are 5 percent higher than the same period last year, but lower by 3 percent quarter on quarter with fourth-quarter 2005 revenues reflecting peak seasonal demand. Quarterly EBITDA and EBIT reached historic high points and grew by 23 percent and 39 percent, respectively, from first-quarter 2005 levels. EBITDA margins improved to 68 percent from 59 percent in the first quarter of 2005 and 64 percent in the fourth quarter of 2005.

In line with its thrust to improve price competitiveness and provide value propositions for specific customer segments, Globe further expanded its roster of innovative offers. Last February, Globe Text NonStop, under the banner offering Globe UNLIMITXT, was made a permanent feature to cater to the needs of heavy SMS users.

Extending its unique and compelling per-second offering for local calls to the IDD service, Globe introduced last March its Globe Tipid IDD Kada-Segundo, which allows per-second charging of US$0.003 to 12 select countries and US$0.007 for other destinations. Globe also made available its Tipid IDD rates of P7.50 per minute for calls to the U.S. and Canada on off-peak hours, and P7.50 per minute for calls to Hong Kong CSL mobile numbers. In addition, under Globe’s Kababayan Program, all Globe and Touch Mobile subscribers were offered reduced rates for calls to Saudi Arabia and Japan, as well as discounted SMS and voice calls to SingTel Mobile of Singapore. Finally, on April 16, Globe introduced another tariff breakthrough, the P0.90 per text to all networks, the lowest inter-network SMS rate in the market today.

This array of value offerings has helped strengthen Globe’s competitiveness and provide impetus for subscriber growth. Globe’s total wireless subscriber base reached 13.2 million at the end of the first quarter of 2006, 6 percent higher than the previous quarter’s 12.4 million and 2 percent better than last year’s 12.9 million. Net additions of about 0.8 million SIM cards reflect a significant turnaround from the previous quarter’s net disconnections of about 6,000.

On the wireline front, Innove Communications, Inc., registered a 2 percent year-on-year growth in service revenues to P1.6 billion by end-March, spurred by growth in the consumer broadband and corporate data businesses. This improvement in revenues was also underpinned by a roster of promotions such as free NDD calls of Globelines postpaid subscribers to any Globelines phone; lower IDD rates; the WorldPass Prepaid service that offered reduced internet browsing rates; and various bundled voice and unlimited dial-up and broadband internet services for Globelines subscribers.

“We are delighted by the market’s response to our initiatives and are encouraged by the results of the first quarter,” said Gerardo C. Ablaza, Jr., president and CEO of Globe. “While we expect competition to remain intense in the succeeding quarters, we will stay on course and strive to further strengthen our market position. We also remain committed to improving our operating efficiency and productivity.”

The above information was submitted on May 8, 2006, by Globe Telecom in compliance with the disclosure requirements of the Securities and Exchange Commission and the Philippine Stock Exchange.

The executive committee of the Board of Directors of Ayala, in the exercise of its authority set forth in the by-laws, has approved today the issuance and offering of Preferred “B” shares of the corporation in the amount of P3 billion with an option to increase the offer size up to P5.8 billion.

The Preferred “B” shares will be offered at its par value of P 100.00 per share with a fixed quarterly dividend rate based on a 5-year Mart. If the shares are not redeemed at the end of the 5th year from date of issue, the Optional Redemption Date, the dividend yield shall be adjusted to the higher of the original dividend yield and the 10-year FXTN benchmark as displayed on Mart1 page. Payment of current dividends shall be cumulative. The Preferred shares shall be non-convertible and shall have no voting and pre-emptive rights.

BPI Capital Corp. and Hongkong and Shanghai Banking Corp., Ltd. will be the Joint Issue Managers and book runners for the Issue. BPI Capital Corp., Hongkong and Shanghai Banking Corp., Ltd. and First Metro Investment Corp. will act as the Joint Lead Underwriters.

The executive committee likewise approved the filing of the Registration Statement covering the shares with the Securities and Exchange Commission and the application for listing of the shares with the Philippine Stock Exchange.

The above information was submitted on May 2, 2006 by Ayala managing director for corporate governance and legal affairs Renato O. Marzan in compliance with the disclosure rules of the Securities and Exchange Commission and the Philippine Stock Exchange.

Ayala has approved an investment of up to US$20 million in The Rohatyn Group Special Opportunity Fund Ltd (SOF). TRG Management LP, a member of The Rohatyn Group (TRG), is the investment manager of the SOF.

The investment will be made by Azalea International Venture Partners, Ltd., a subsidiary of Azalea Technology Investments.

The SOF is a fund whose primary (but not exclusive) investment objective is to generate superior risk adjusted returns and, from time to time, current income by opportunistically acquiring a diversified portfolio of undervalued investments and investments with significant growth potential in emerging market regions, including, without limitation, Latin America, Eastern Europe, Asia and Africa.

Ayala’s placements in investment funds such as the SOF, are part of Ayala’s strategy to work with partners to seek opportunities to expand its equity portfolio and generate returns from medium term investments.

The above information was submitted on April 3, 2006 in compliance with the disclosure requirements of the Securities and Exchange Commission and the Philippine Stock Exchange by Ayala managing director and head of corporate governance and legal affairs Renato O. Marzan.