Statement of Mr. Froilan A. Tampinco, Vice President for Asset Management and Electricity Trading, in response to issues raised by Mr. Victor Agustin of the Philippine Daily Inquirer in his column dated 13 September 2006

14 Sep 2006

The Power Sector Assets and Liabilities Management Corporation (PSALM) wishes to clarify the issue raised by Mr. Victor Agustin in his column "Cocktales" dated 13 September 2006.

To quote the item in Mr. Agustin's column: "For still unclear reasons, PSALM's Nieves Osorio stopped last Friday's press conference being called by Balayan Electric, a power company said to be controlled by ABC-5's Antonio Cojuangco and San Miguel's Ramon Ang. The press briefing was to be held in the SGV building, where PSALM has its offices."

We wish to point out that on the Friday Mr. Agustin mentioned, concerned PSALM officials and employees, including President and Chief Executive Officer Nieves L. Osorio, were at the Department of Energy for the auction of the Pantabangan-Masiway Hydroelectric Power Plant Complex. The bidding, which received bids that were way above PSALM's expectations, was won by First Generation Hydro Power Corporation with a $129-million offer. The success of the bidding was the result of strong competition and the continued interest of investors in the Philippine power assets.

If, indeed, Balayan Electric was to hold a press conference that Friday, PSALM did not know anything about it. Therefore, it is unclear to us how Ms. Osorio could have stopped a press conference she did not know anything about. Besides, Ms. Osorio, or any other PSALM official for that matter, is not in any position to stop anybody's press conference. It has never been PSALM's business to meddle in the affairs of other companies, whether or not these affairs have something to do with the privatization of the power industry.

It also remains unclear why Balayan Electric will hold its press conference in the offices of PSALM, if this is what Mr. Agustin is implying in his column item. If they are interested in bidding for the assets of the National Power Corp., they can always join in consortiums being formed by bidders to participate in the coming bidding for the 360-megawatt Magat hydroelectric power plant and the 25-year concession of the National Transmission Corporation.

Thank you for giving us the opportunity to clarify this issue.

(Sgd.) Froilan A. Tampinco
Vice President for Asset Management and Electricity Trading
PSALM Corporation

Strategic Communications and Partnership Division
Tel. No. (632) 9029067