Dear Shareholders

I reported last year that the outlook for 2007 was positive, and indeed the performance of our telecommunications and food businesses during this year showed significant progress.

Indofood achieved considerable advancement during the year. The enhancement in our operational efficiencies, marketing and distribution networks have contributed to significant improvement in our performance, despite rising cost pressures. As a premier food company, we continue to maintain our market leadership position for most of our product categories. The expansion opportunities we concluded in the Agribusiness part of Indofood, in particular the acquisition of a 64.4 per cent interest in Lonsum plantation, have allowed us to move toward self sufficiency in our CPO requirement and to become a major player in the oil palm plantation industry. The rising trends of oil and soft commodity prices are expected to continue in 2008 and present challenges to Indofood. However, we believe Indofood as a total food solutions company, supported by four complementary Strategic Business Groups and its dynamically evolving management will continue to deliver sustainable results.

PLDT’s innovative spirit in developing new and better product offerings provided the basis for another year of sustainable growth in revenues, which amongst others saw further unprecedented gains in cellular penetration. Emphasis is now being given to new growth areas: in broadband, video and mobile commerce, without of course neglecting its traditional businesses. We see another successful performance for PLDT in 2008.

The year 2007 was a milestone for MPIC. After many years of restructuring gains and losses, MPIC reported positive core net income for this year. Indeed, excellent progress has been made in the water distribution and healthcare businesses that were acquired earlier in the year. The outlook for 2008 suggests that complementary infrastructural business will be added to this portfolio as the business has returned to profitability.

First Pacific remains focused on its search for a transformational investment that will complement and balance its current portfolio. The increased dividend flows allow us to consider various capital management initiatives and acquisition opportunities which, together with the ongoing performance enhancements of our existing businesses, should offer steady improvement in shareholder returns in the years to come.

Sincerely

ANTHONI SALIM
Chairman

31 March 2008