PLDT's 2001 Final Results

RNS Number:0165S
First Pacific Capital (1997) Ld
26 February 2002

FIRST PACIFIC COMPANY LIMITED

PRESS RELEASE

Tuesday, 26 February 2002

PLDT's NET INCOME TRIPLES IN 2001

The attached press release was distributed today by PLDT, in which First Pacific
has a 24.4 per cent economic interest, and a 31.5 per cent voting interest.

Philippine Long Distance Telephone Company ("PLDT") is the leading
telecommunications provider in the Philippines. Through its three principal
business groups - fixed line, wireless and information and communications
technology - PLDT offers a wide range of telecommunications services across the
country's most extensive fiber optic backbone and fixed line, cellular and
satellite network.

PLDT is listed on the Philippine Stock Exchange (PSE:TEL) and its American
depositary shares are listed on the New York Stock Exchange (NYSE:PHI) and the
Pacific Stock Exchange. PLDT has one of the largest market capitalizations among
Philippine listed companies.

* * *

For more information, please refer to: http://www.pldt.com.ph or contact:

Butch Jimenez

Vice President

Media and Corporate Communications

Tel: (632) 816-8468

Fax: (632) 893-5174

Anabelle Chua

Treasurer and First Vice President

Tel: (632) 816-8213

Fax: (632) 844-9099

Information about First Pacific can also be accessed on:

Web Site: www.firstpacco.com

Email: info@firstpac.com.hk

PLDT NEWS

PLDT's NET INCOME TRIPLES IN 2001

• Net income increases to P3.4 billion in 2001 from P1.1 billion in 2000
• Consolidated EBITDA Margin Remain Strong at 53 percent

• PLDT Wireless Cements Its Market Leadership

• Cost Containment, Liability Management Efforts Prioritized

MANILA, Philippines, 26th February 2002 - Philippine Long Distance Telephone
Company ("PLDT") (PSE: TEL) (NYSE: PHI) today announced that its net income
tripled to P3.4 billion in 2001 from P1.1billion in 2000. Consolidated revenues
and EBITDA for the year ending 31st December 2001 both grew by 17 percent,
marking a year of solid performance for the country's leading telecommunications
company.

Growth was driven largely by the continuing success of Smart Communications,
Inc. ("Smart") which experienced a dramatic turnaround in net income for 2001.
Pilipino Telephone Corporation's ("Piltel") Talk N' Text service also
contributed to the growth of Smart. Together, Smart and Talk N' Text more than
doubled their combined GSM subscriber base to almost 6 million, capturing a 57
percent share of the total GSM market. The PLDT Group added 3.3 million new GSM
subscribers in 2001, making it the fastest growing cellular business for the
second consecutive year.

PLDT's fixed line business, with 2.2 million subscribers and a market share of
almost 70 percent, remained a key strength of the Group and provided strong and
stable cash flows for PLDT.

Consolidated net income for 2001 stood at P3.4 billion, representing a 208
percent improvement over 2000 consolidated net income of P1.1 billion.
Consolidated EBITDA rose 17 percent to P39 billion from P33.3 billion last year.
Consolidated EBITDA margin remained strong at 53 percent.

Consolidated revenues for the Group increased to P73.6 billion for the year,
representing an improvement of 17 percent over revenues of P62.9 billion last
year. Consolidated net operating income similarly improved to P17.1 billion from
P12 billion in 2000. Earnings per common share grew to P11.35 from a loss per
common share of P0.85 in 2000.

"Our strategy to transform PLDT from a traditional telephone company to a
world-class communications provider offering varied and rich platforms of
communication is starting to show through in our 2001 performance," commented
PLDT President and CEO, Manuel V. Pangilinan.

Strong Wireless Performance Underscores Business Vision, Strategy

PLDT's strategic acquisition of Smart in 2000 allowed PLDT to strengthen its
position in the fast growing wireless business. The wireless subsidiary
outperformed the industry and recorded a significant turnaround from a net loss
of P406 million in 2000 to a net income of P3.9 billion in 2001. Smart's EBITDA
posted a dramatic increase of 164 percent, from P4.3 billion in 2000 to P11.3
billion in 2001.

The combined GSM subscriber base of Smart and Piltel's Talk N' Text service more
than doubled during the year, rising from 2.7 million subscribers as of 31st
December 2000 to end 2001 with almost 6 million subscribers.

Smart added 2.3 million new GSM subscribers during the year and had 4.6 million
GSM subscribers at year-end. Together with its analog subscriber base, Smart had
total subscribers of 4.9 million as of 31st December 2001, translating into a
market share of 44.1 percent.

Piltel's GSM subscriber take-up during the year hit almost one million net
additions resulting in 1.3 million Talk N' Text users at year-end. When combined
with its analog subscribers, Piltel had 13.3 percent market share at year-end.

Smart and Piltel posted record-breaking subscriber take-up in December, 2001;
together, they posted combined net activations of over 400,000 subscribers in
that month compared to an average of 275,000 net activations per month for 2001.

The surge in subscriber numbers was complemented by Smart's launching of
innovative and interactive value-added services such as Smart zedtm and Smart
Money. These value-added services have started to contribute revenues for Smart
and have enhanced ARPUs. Smart Money received the "Most Innovative GSM Service"
award at the recently concluded 3rd GSM Congress held in Cannes, France last
March 2001.

Texting (SMS) proved to be a strong source of revenue for Smart in 2001. An
average of 39 million text messages per day were sent in 2001 compared to an
average of 18 million messages a day in 2000. Text revenues more than doubled to
P6.6 billion in 2001 from P2.2 billion in 2000.

Mr. Napoleon Nazareno, Smart's President and CEO noted that Smart is well
positioned to maintain its market leadership in the wireless sector.

"Our leadership position in the wireless GSM market has definitely given Smart
the momentum towards continued growth. We shall build on the gains we have
achieved in 2001 to ensure that Smart fulfills its commitment to provide a broad
range of world-class wireless products and services at affordable prices to the
Filipino people," said Mr. Nazareno.

Fixed Line - Platform for Stable Revenues and Growing Data Business; Optimizing
Efficiencies and Liability Management Initiatives Progressing

PLDT's core fixed line business maintained its leading market position in 2001.

Fixed line subscribers for the PLDT Group grew to 2.2 million representing a
market share of nearly 70 percent. Of the incremental additions of 178,044,
130,597 subscribers were on the prepaid service.

The fixed line business for 2001 exhibited moderate yet stable growth. Revenues
grew to P46.9 billion while EBITDA levels were maintained at P27.3 billion.
EBITDA margins remained high at 58 percent.

Local exchange revenues increased by 15 percent, reaching P21.9 billion in 2001.
PLDT's strategy to offer a prepaid fixed line service helped to reduce churn,
maximize the utilization of excess capacity, and develop a growing client base
from a larger segment of the market.

International long distance revenues decreased by 13 percent to P11.5 billion
due to lower settlement rates despite a significant increase in traffic.
Similarly, national long distance revenues declined by 20 percent to P8.4
billion on account of lower NDD rates and lower volumes, the latter being
affected by the lower cost of communicating via text and e-mail.

However, revenues from data and other network services jumped by 61 percent to
P4.8 billion, driven by increasing demand for higher bandwidth and packet-based
services. Data and other network services now account for almost 7 percent of
PLDT's consolidated revenues.

"Part of our strategy moving forward is to lead the data services business which
we believe is the next source of revenue growth for our fixed line business,"
said Pangilinan. "We foresee demand for data and network services to continue
increasing in the near future."

During the year, efforts were initiated, focusing on reducing capital
expenditure and operating expenses as well as improving operational
efficiencies. From a high of P23.7 billion in 1997 representing 67 percent of
revenues, PLDT's capex for 2001 was reduced to P9.4 billion, representing 20
percent of revenues. Furthermore, capex was focused primarily on the expansion
of high growth areas such as data services.

Cash operating expenses have also been consistently declining quarter on quarter
since the start of 2001. Operating efficiency has improved as demonstrated by
the number of fixed lines in service per PLDT employee, which increased from 144
in 2000 to 161 in 2001.

The reduction in capital expenditure and the Company's focus on containing cash
operating expenses have also contributed towards PLDT's liability management
initiatives designed to address its maturing debts. Between the periods
2002-2004, PLDT has maturing debt obligations of approximately US$1.3 billion of
which 50 percent is targeted to be serviced by internally generated cash flows.

As part of its liability management efforts, a US$149 million facility was
obtained by PLDT from Kreditanstalt fur Wiederaufbau (KfW) of Germany. The
facility granted to PLDT is a 9-year loan to be disbursed over three years and
has a two year grace period. In addition, discussions with other traditional
lenders for new facilities are on-going.

"Addressing our debt maturities is a major priority of PLDT," commented
Pangilinan "and the agreement with KfW represents a key milestone in the
on-going liability management efforts of PLDT."

Accelerated Transformation

Pangilinan noted that the year 2001 was the year PLDT accelerated its
transformation from a predominantly fixed line telephone company into an
integrated telecommunications service provider. ePLDT, a subsidiary of PLDT has
started to move from a start-up pioneering venture into one of the leading
information, communications and technology companies in the Philippines. ePLDT
is building its operations and is expected to generate stronger revenues from
its investments in its Vitro data center, its call centers and its Internet
services through Infocom Technologies.

"Optimizing the largest landline infrastructure in the Philippines and combining
it with strategic investments in cellular, satellite, and internet over the past
three years has enabled us to begin realizing our vision for PLDT. Our strong
performance in 2001 is clear evidence of this," Pangilinan stressed. "It is our
expectation that PLDT will continue to broaden and diversify its revenue base,
lowering our dependence on the mature fixed line business and ensuring continued
revenue growth moving forward."

###

Consolidated Operating Results for the Year Ended December 31, 2001.

PLDT PLDT Consolidated
(In Million Pesos) 2001 2000 2001 2000
Revenues 46,064 44,270 73,573 62,903
Expenses 32,220 29,871 56,428 50,860
Operating income 13,844 14,399 17,145 12,043
Other expenses - net 10,317 7,415 14,268 11,247
Income before tax 3,527 6,984 2,877 796
Provision for tax 834 2,069 1,220 1,822
Income (Loss) before minority interests 2,693 4,915 1,657 (1,026)
Minority interests - - (1,761) (2,134)
Net income 2,693 4,915 3,418 1,108
EBITDA 27,029 26,848 39,028 33,255

This press release may contain some statements which constitute "forward-looking
statements" that are subject to a number of risks and uncertainties that could
affect PLDT's business and results of operations. Although PLDT believes that
expectations reflected in any forward-looking statements are reasonable, it can
give no guarantee of future performance, actions or events.

XXX

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