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.8MINUTES OF THE ANNUAL MEETING OF THE STOCKHOLDERS OF

FIRST PHILIPPINE HOLDINGS CORPORATIONHELD AT'THE MERALCO THEATER, LOPEZ BUILDING

ORTIGAS AVENUE, P ASIG CI1YON MAY 31,2010

The annual meeting of the stockholders of First Philippine Holdings Corporation

("Corporation") was held at 3:00 p.m. on May 31, 2010 at the Meralco Theater, Lopez

Building, Ortigas Avenue, Pasig City. The attendance of the Board of Directors is provided

below, to wit:

Present: Mr. Oscar M. LopezMr. Augusto Almeda-LopezAmb. Cesar B. BautistaMr. Thelmo Y. CunananMr. Jose P. De JesusMr. Peter D. Garrucho, Jr.Mr. Oscar J. HiladoMr. Elpidio L. IbanezMr. Eugenio L. Lopez IIIMr. Federico R. LopezMr. Manuel M. LopezChief Justice Artemio V. PanganibanMr. Juan B. SantosMr. Washington Z. Sycip

Absent: Mr. Emesto B. Rufino, Jr.

CALL TO ORDER

The meeting was called to order by Mr. Oscar M. Lopez, Chairman of the meeting., The minutes of the proceedings were recorded by Mr. Enrique I. Quiason, Corporate

Secretary.

PROOF OF NOTICE

The Secretary reported that notices of the annual meeting of the stock;holders had

been sent to the stockholders of the Corporation. He had executed a certification to that

effect. The Chairman directed the Secretary to append the said certification together with a

copy of the notice to the minutes of the meeting.

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8 8DETERMINATION OF QUORUM/GROUND RULES

The Secretary reported that out of the 594,519,812 common shares issued and

outstanding, there were present either in person or represented by proxy 408,848,256 shares

of the common stock representing 68.77% of the outstanding common capital stock of the

Corporation. There being a quorum, the Chainnan of the meeting declared the meeting

open for the transaction of business.

For fair, orderly, and efficient proceedings, the Corporate Secretary advised that the

following ground rules were going to be observed during the meeting:

(a) Each stockholder shall be allowed one (1) vote per share. In case of election ofdirectors, a shareholder is allowed to cumulate his votes;

(b) A stockholder who wishes to take the floor must identify himself and direct hisquestion to the Chainnan. If he is a holder of a proxy, he is to state this fact and thename of the stockholder who granted him the proxy. He must first be recognized bythe Chainnan before he can have the floor;

(c) Questions or comments from the floor will be entertained subject to the

following:

(i) Only questions or comments relevant to the particular item in the agendabeing discussed will be allowed;

(ii) To give equal chance to everyone -a stockholder can ask one (1)question or give one (1) comment. If there are questions or comments which couldnot be entertained on the floor, a stockholder may submit its position in writing tothe Office of the CQrporate Secretary within five (5) days from today;

(d) A stockholder shall be given, at most, two (2) minutes to ask a question or todiscuss his comments;

(e) Voting shall be by viva voce. The stock transfer agent shall assist in recordingthe votes.

The Chairman may waive or allow exceptions to the foregoing rules if, in hisjudgment, he deems it necessary or proper under the circumstances. Any personwho fails to follow the foregoing guidelines may be declared out of order and barredfrom further participation in the proceedings or escorted from the venue.

The Corporate Secretary reminded everyone to observe proper decorum and duecourtesy during the meeting.

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APPROVAL OF MINUTESOF PREVIOUS MEETINGS

On motion made and seconded, dIe reading of dIe minutes of dIe Annual

Stockholders Meeting held last May 25, 2009, copies of which had earlier been circulated to

dIe stockholders, was dispensed widI, and dIe minutes were approved as recorded.

THE CHAIRMAN'S REPORT

Mr. Oscar M. Lopez, dIe Chairman & Chief Executive Officer, dIen rendered his

annual report, dIus -

Fellow Stockholders and Staff-members,Partners, Friends andOilier Stakeholders of First Philippine Holdings Corporation,Ladies and Gentlemen:

Good afternoon to all of you and welcome to our 48th Annual Stockholders'Meeting. Since my return to dIe management of First Holdings shortly afterdIe EDSA Revolution in 1986, this will also be dIe 25th annual stockholders'meeting dIat I will be presiding over as chief executive officer of dIeCorporation. There are reasons why, years from now, I may look back onthis day and meeting widI nostalgic attachment, for reasons I will tell youabout in a short while.

There are many things we have to cover this afternoon and, should you havequestions about aspects of our businesses and financial results, we will do ourbest to provide you satisfactory answers. So let's proceed to dIe business athand.

This year I would like to do something a little different from dIe manner bywhich I have rendered my report in past years. I would like to start byannouncing a decision dIat I have reached, and let things flow from dIere.

A few weeks ago, during a celebratory dinner hosted by various companiesdIat I head to help me celebrate my 80th birthday, I announced to dIeofficers, staff members and guests dIat I intended to step down, or aside, ifyou will, as Chief Executive Officer of First Philippine Holdings Corporation I.on June 12,2010. Apart from being our National Day, June 12 will mark dIe I82nd anniversary of dIe establishment of E & F Lopez Inc. by my fadIerEugenio Sr. and his brodIer, Fernando, E & F was dIe forerunner of ourLopez Group of Companies today. For us, dIerefore, it has always been anauspicious date.

I have submitted my letter to dIe Board of Directors, through dIe Vice-Chairman, expressing my desire to relinquish my position as Chairman and

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8 18CEO. I have recommended that Federico R. Lopez be elected as the nextChairman and CEO of First Holdings. Federico, or Pili, has been with thecompany for the past 22 years and was appointed as Managing Director forEnergy in 2008 when Peter Garrucho opted to retire.

To be sure, I do not want to step completely out of the picture. I would liketo remain active as you Chairman Emeritus so that I will still be in a positionto contribute to the Corporation, especially with regards to the long termstrategy of this Company. How we determine and give rise to that will alsohave to be done in accordance with established protocols in ourorganizational meeting of our new Board of Directors following ourstockholders meeting this afternoon.

Therefore, this will probably be the last time that I address you as yourCorporation's regular Chairman and Chief Executive Officer and I hope youwill indulge me if my remarks sound a bit like a valedictory address.

My career as a corporate executive has spanned 50 years since I returnedfrom schooling in the United States in 1960. The first six years, I was withthe Manila Chronicle as its publisher. Then, in 1966, I joined MeralcoSecurities Corporation, as First Holdings was originally called, to head thenewly formed Department of Economic Research and Development.Initially, we were a two-man office. There was me. And there was anotherof our current Directors, then a very young Ernesto B. Rufino who was arecent graduate of Harvard Business School. We were Corplan and businessdevelopment all rolled into one and our assignment was to strategicallyposition Meralco fot what then appeared like a very bright, limidess future.

What followed was a heady, exciting, grand few years that even now, we old-timers look back on as Meralco's "Golden Age". Even though there were afew storm clouds in the Philippine economic sky -I don't know how manyof you remember the series of devaluation of the peso from P2.00 to $1.00 -the Sixties were an exciting time for the country. We were industrializing andwe were among the darling economies of Asia. Meralco was building andcommissioning a new power plant virtually every 18 months to keep pacewith a 12% annual increase in the demand for power. It charged itscustomers the lowest prices for electricity in Asia and operated to one of thelowest system-loss rates in the region. Meralco symbolized excellence andgreat potential, and attracted the best and the brightest graduates in thecountry as ~ employer of choice. At the Department of EconomicResearch and Development, we were doing our bit to feed Meralco's appetitefor synergy and diversification.

In March 1967, we created First Philippine Industrial Corporation toconstruct and operate the first major oil pipeline in the country. Today,more than 43 years later, FPIC remains the only fuajor oil pipeline operatorin the country linking the Shell Refinery in Batangas to the Pandacan oildepot in Manila. In February 1969, we started Philippine ElectricCorporation as the country's pioneer manufacturer of utility and industrial

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electrical transformers. Today, it continues to prosper as the country's onlymanufacturer of transformers and related products. In September 1969, wefounded Philippine Petroleum Corporation, the country's first lubricating oilbasestock refIner, whose petroleum by-products would also serve to fuel ourpower plant in Pililla, now called the Malaya power plant. In November1969, the construction division of Meralco was spun off as PhilippineEngineering and Construction Corporation, or "PECCO", with my brotherManolo as its fIrst President. Today, that company is called First Balfour,Inc. and it remains as the construction subsidiary of First Philippine

Holdings Corp.

But, like most good things, those heady days eventually came to an end.First, there was the world oil price shock following the 1967 Israel-Arab Warand the establishment of OPEC. All over the world, the cost of powerbegan to rise and the relative competitiveness of non-oil producingeconomies began to suffer. Then came the declaration of Martial Law andthe systematic dispossession by the Marcos dictatorship of the Lopez Familyof its businesses. First Holdings was forced to sell its most valuable asset,Meralco, to a newly-established and Kokoy Romualdez-controlled MeralcoFoundation, Inc. under duress. The darkness had set in, and this darknesswould stay for fourteen years. We relinquished our positions in ourcompanies, thinking that it would be the last time we would ever be involvedin them.

But those dark days, did eventually pass away. Almost fourteen years later,shortly after the EDSA Revolution, the precise date was April 15, 1986, I re-entered the offices of Meralco Securities Corporation, now called FirstPhilippine Holdings Corporation, with instructions from the Government ofCory Aquino to take over headship of the Corporation. What I found was acompany that was a pathetic shadow of the company I had been forced toleave, virtually bankrupt and unable to meet even its payroll obligations,manned by 22 remaining loyal, but demoralized, staff members. Againstliabilities of Pl.2 Billion, many of which were overdue and in default, thecompany had only P26.0 Million of liquid assets left in its till. Operatingcash flow was barely sufficient to meet the monthly payroll. Some P15.0Million was owed. to the families of contract workers who had been Imobilized for an ill-fated project in the Middle East, and more than 200 jrelatives were lining up outside First Holdings' offices every day trying tocollect the moneys owed to them.

As I think back to that day, even now, I feel that the natural reaction of areasonable man would have been to decline the appointment on the groundsthat to save First Holdings was an impossible task. But something movedme to do otherwise. I still remember it was Jake Almeda-Lopez, who is stillwith us as a Board Director of this Company, who reminded me then thatthis was a company, a business, that my father had created, had fought forand had died for. To honor him, I could do no less than give my utmost,win or lose, to try to save the company.

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And so we did, litde by litde. First, we borrowed where we could, relyingprincipally on the Lopez family reputation, to meet day to day requirements.We sold one of First Holdings' remaining good assets, its 25% ownershipinterest in Pilipinas Shell for P507 million, and used the proceeds to pay backhalf of the company's debt and to restructure the other half. We went to theMiddle East and got our bonds back, eliminating a major threat to thecompany. Simultaneously, we undertook similar rehabilitations at PhilippineElectric Corporation and Ecco-Asia, our manufacturing and constructionsubsidiaries, so that they could once agajn contribute to revenues. And then,in 1991, after a long and arduous legal batde to recover the ownership ofMeralco, ownership that had been coercively taken from us at the outset ofmartial law, we finally gajned the Supreme Court decision that we hadsought. We were able to recover a 15% ownership interest in Meralco in atransaction that also enabled us to setde the balance of our debt. Only 15%from the close to 100% that had been taken from us, but it was enough toenable us to rebuild the Corporation.

The nineties were good years for First Holdings. We rebuilt powergeneration as a core business, starting with the 225-megawatt Bauang dieselfired power plant, a build-operate-transfer contract with National PowerCorporation that will reach the end of its 15-year contract life this comingJuly. Then came the Panay Power generating plant that we have since sold,followed by the 1,SOO-megawatt natural gas-fired plants in Batangas, SanLorenzo and Santa Rita with the natural gas emanating from the newlydiscovered Malampaya gas field off Palawan.

We also entered into the property development business, first with our 350-hectare industrial park straddling the municipalities of Sto. Tomas andTanauan, Batangas, then through our participation in the redevelopment ofthe mothballed Rockwell power plant site in Makati into a very successfulcommercial complex. And we entered into large-scale infrastructure, withour investment in the rehabilitation and redevelopment of the North Luzon

Expressway.

The first decade of the 21 st century has been a story of two parts. The first is

the continued growth of our power business. Through First GenCorporation and its subsidiaries, we are, today, the country's foremostFilipino-owned and controlled power generating company with a total 3,047MW capacity to its name. Winning the bid for EDC, the country'sgeothermal company and today, the second largest such company in theworld, and winning a number of privatization bids for hydroelectric plantsmainly in Pantabangan, Nueva Ecija we have also become the country'sforemost proponent of clean and renewable power.

The second part of our story has been the struggle to realize value from ourlong-term investment in Meralco. This struggle has placed us constandy atloggerheads with government and with the rate regulators whose tendency isto do what is popular, keeping power rates as low as possible, and forcing thedistribution utilities to subsidize those rates. To a certain extent, Meralco

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8 8was able to compensate for this by becoming more efficient, reducing itssystems and pilferage losses from the high teens down to 8.5% where theyare today. But that loss rate is now at a level comparable with the bestutilities in the world and any further reduction in loss rates will requiresignificant new investments in low-loss equipment. As reported, however, inthe Annual Report, the opportunity arose for us to divest a major part of ourownership in Meralco at an average price that is gready advantageous to usand we took advantage of that opportunity. In the process, we were able toresolve a number of debt issues that had arisen over the past several yearsbecause of our ownership of Meralco shares.

And so, fellow stockholders, entering my third childhood at a nice mellowage of 80, I think that the time is right to step down from the CEO-ship ofour company. My first career here lasted six years. My second has justpassed the 24-year mark. When I came back into First Holdings, it was closeto bankruptcy. At the time I presided Qver the 1986 annual stockholders'meeting a few months later, things were still very iffy for the company, Theaudited financials for the year ended June 30, 1986 indicated total assets ofPl.42 Billion, of which approximately Pl.l Billion consisted of investmentsand advances that could not be up-streamed or liquidated. The company'scash balance was reported at P412,004, Against these, the company hadloans and accounts payable of some P750.0 Million. Today, as I speak toyou, our audited financial statements for the year ended December 31, 2009list our total assets, at P148.8 Billion and total liabilities at approximatelyP90.0 Billion. Our cash reserves are at P25.8 Billion.

It is the dream and aspiration of every professional manager, of everybusiness leader, to leave the business in better condition than when he or shefirst assumes responsibility for it. This is in accord with the law ofstewardship. Modesty aside, I think that I have earned the right to make thatclaim, and within the pantheon of Lopez business leaders, I am certain thatmy father and my brother are smiling down on me for a job well done. Butthis much I will share with you. People who know me, know of my passionfor climbing mountains, a passion that I indulge in even today. The higher,the better. But none of the mountains I have climbed have had steeperascents, or more treacherous descents, than those that 1 have had to traversein my career at First Holdings. I thank all of our directors, officers and staffmembers for making the climb with me. I thank all of you, fellowstockholders, for the trust, confidence and support you have always givenme. And I thank my wife and my children for being with me every step ofthe way.

And now, I'd like to say just a few words about our future as a business.Throughout its close to 49-year history, First Holdings has always delightedin achieving what others have said were impossible undertakings. The veryacquisition of Meralco in the early 1960's, then the country's largest companyand one that had, at the time, always been under American management, wassomething that the Filipino business community did not even dare tocontemplate. Until'my father and his associates dared. When we diversified

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no business can be successful in the long run unless it protects and nurturesthe environment in which it operates. Some of the things that have given methe greatest pleasure over the years are things we have done, to the extentthat we could afford them, to contribute to the welfare of the environmentand of the society that we serve. It warms my heart that these initiatives aretoday being continued in our companies, in ways bigger and better than Icould ever have imagined. Let me mention just a few of them.

In July 1987, even though we had little in the way of resources, theopportunity arose to enter into a reforestation contract for the Departmentof Environment and Natural Resources, funded by the US AID, for a 1,000-hectare tract in Bamban and Sacobia, Tarlac. During the years that we werefighting to recover our Meralco shares and to rehabilitate Philec and Ecco-Asia, this project gave us something different to direct our energies to, and tocelebrate small victories. The project reached the end of its termsuccessfully, and a couple of years after, following the eruption of Mt.Pinatubo, I visited the site, half expecting to see all the trees that we hadplanted flattened by the eruption. To my great surprise, many of the treessurvived and the trees were growing even more quickly than we hadanticipated because the ash fall provided the trees with fertilizer. Throughthe years since then, we have always exploited every excuse to plant moretrees. It thrills me to know, however, that in its Binhi Greening Legacyproject, in which 6.25 million trees are to be planted in 10,000 hectares overten years, our newly acquired subsidiary EDC is carrying this passion andcommitment to the greening of the Philippines to new heights.

In the nineties, I started devoting time and attention to biodiversity as adirector of Conservation International. This included treks through some ofour last remaining .virgin forests in the Sierra Madre range near Palanan,Isabela. The Philippines is considered one of the top 25 biodiversityhotspots in the world, that is, the world's most biologically richest and mostthreatened ecosystems. Today, First Gen, along with First PhilippineConservation, Inc., are spearheading the protection of the Verde IslandPassage off the coastal waters of Batangas, Mindoro, Marinduque andRomblon. The Verde Island Passage hosts a fragile ecosystem that is sosignificant that it has been called the "Center of the Center" in marine

biodiversity.

Over the past ten years, we have also turned our attention to the challengesof education and poverty alleviation, within the context of a much wider setof initiatives being undertaken by Lopez Group-related companies andfoundations such as Bantay Bata, Bantay Kalikasan and the KnowledgeChannel. Our particular efforts have centered around providing essentialfacilities and funding to the Paliparan squatter resettlement site inDasmarifias, Cavite,. a project brought to us by the late Sister Christine Tan,and more recendy, the Cauayan, Laguna resetdement project for informalsettlers being relocated from along the banks of the Pasig River, as well as forthose victimized by Ondoy. These projects receive sustained support as partof our Corporate Social Responsibility program and budget.

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Within First Holdings, its subsidiaries and across the wider Lopez Group ofcompanies, I have also been the principal advocate, the Pied Piper, if youwill, of business excellence practices and initiatives. This started with ISO9000 and its adjuncts, ISO 14000 and OHSAS 18000 in the mid 1990's,followed by Environment, Safety and Health in the late 1990's, the MalcolmBaldrige quality framework and Six Sigma in 2001 and, more recently,Investors in People, world-class governance and the Balanced Scorecard. Myunderlying philosophy behind these advocacies is very simple -in today'sglobal economy, to remain competitive in any market, you must be as goodand as committed to excellence as your global competitors. Nothing less willsuffice.

Corporate Governance has, as of late, been the new mantra in whichinvestors have been asking of all companies. I am happy to share with youthat your company has for the second year in a row been bestowed the"Gold Award" in the Corporate Governance Scorecard project of TheInstitute of Corporate Directors and the country's corporate regulators. Infact, there are five, Lopez Companies that were awarded during theceremonies held last May 27th. First Gen and EDC were likewise recognizedin the "Gold Category" with scores above 95 percent; while BenpresHoldings and ABS-CBN received the "Silver Award".

Finally, I have also actively been promoting lifetime wellness for all ouremployees and the members of their families. A company's greatest andmost expensive resource are its people, and it simply makes good businesssense to do what is necessary to protect that resource. Of course, it helpsthat I love climbing mountains and I practice for those climbs by going upand down six floors every day to get to my office. And it therefore helps tobe able to challenge all our employees that if an 80-year old can do it, then soshould they. .

As I mentioned at the start of my remarks, I have decided to step down asyour Chairman and CEO, but I would like to remain active as a ChairmanEmeritus in order to continue serving First Holdings in its "NEWBEGINNINGS". That, perhaps, will take the fonn of remaining as aguiding light for our core values, our business excellence and CSR activities,in order to ensure that we are at all times competitively honed to take on thechallenge of competing in the global marketplace, and in order to ensure thatwe always have our feet on the ground in appreciating the realities and needsof the publics whom we serve in our country.

Again, I thank you for what you have bestowed upon me all these years -your trust, your support, your friendship and your affection. I hope that Ihave reciprocated properly by serving you well. I also hope to try to be inthe tradition of the two Lopezes who preceded me, namely my father andelder brother, Geny, who died with their boots on in the service of theircompanies. I also hope to continue seeing some if not all of you once in awhile in the coming 'years. If not, I'll definitely see all of you in the next life.

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Thank you and have a good afternoon.

THE PRESIDENT'S REPORT

Mr. Elpidio L. Ibanez, President & Chief Operating Officer of the Corporation, was

given the floor and rendered his report, thus -

Mr. Chairman,Fellow Shareholders,Good Afternoon,

Over the past two and a half years we have made substantial changes in FirstHoldings to address our debt problem as well as take advantage of theopportunities to grow our various businesses.

In 2008, we sold our tollroad business, First Philippine Infrastructure Inc.More conspicuously, we have divested a substantial portion of our ownershipin Meralco down to the current level of 6.6%. We have since madeadditional investments in First Gen, Rockwell Land and First Solar.

In July 2009, First Holdings sold 223 million common shares of Meralco(about 20% of the outstanding stock) to Piltel for P20.07 billion, whichresulted in a net gain of P7.2 billion. In March 2010, we completed the saleof 74.7 million common shares of Meralco (approximately 6.6% of theoutstanding stock) to the Metro Pacific Group for a total. price of P22.4billion. This resulted in a net gain of P23.6 billion, which is included in ourresults of operations for the first quarter of 2010.

These developments allowed us to deliver solid financial results. FirstHoldings ended 2009 with a net income attributable to equity holders of theParent amounting to P8.S billion, or P13.40 per diluted share. This is thesecond highest level of net income we have ever attained.

2009 income was significandy better than the Pl.2 billion registered theprevious year due to the P7.2 billion net gain from sale of our 20% interest inMeralco, lower finance costs and foreign exchange losses, as well as higherearnings posted by most of our subsidiaries and associates. Even without thegain, recurring income for 2009 improved over last year. You will hear moreabout the earnings of our major subsidiaries and associates later.

At the Parent level, we used the Meralco proceeds to pay down bank debt(pI0.0 billion) and invest in our existing businesses (p9.0 billion). We endedthe year with a net cash of about PS.O billion. As a positive consequence ofour deliberate efforts to pare down debt, our credit rating from Philratingsimproved two notches, from FRS A plus to FRS Aa. This is important to usas we compete in today's difficult credit market.

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8 8We had been paying dividends to our common shareholders since 2004, butthis was briefly interrupted in 2008. We have resumed our dividendpayments in Decem,ber 2009 and have returned close to Pl.0 billion to ourcommon and preferred shareholders.

Reducing our stake in Meralco was a difficult decision we had to make. Itallowed us to reduce our risk profile and with the cash we raised, we are in amuch better position to compete. Moving forward, we consider our 6.6%remaining interest in Meralco as strategic. We do not intend to sell theseremaining shares soon. However, international accounting standards dictatethat with the sale, First Holdings' significant influence over Meralco wasdeemed lost as its remaining interest entides it to only one seat out of the 11seats in the Board of Meralco.

Hence, effective March 31, 2010, our investment in Meralco was re-classifiedfrom the Investments in associates account to the Available-for-sale financialassets (AFS) , which are both non-current assets. AFS financial assets aremeasured at fair value. Any periodic gain or loss is recorded to an unrealizedgain or loss account that is reported as a separate item in the Equity sectionof the Balance Sheet. The gains or losses from available-for-sale financialassets are not reported in the income statement until such time that theinvestments are sold or determined to be impaired.

Let me now walk you through our subsidiaries' and associates' performance:

First Gen

Recall that in November 2007, First Gen through Red Vulcan won the bidfor the Energy Development Corporation at a purchase price of P58.5billion. The acquisition was funded by bridge loans at the First Gen and RedVulcan levels. Reducing and terming out its obligations was the focus for2008 to 2009 for First Gen. The success of its various refmancing activitiesbrought finance costs down to $112 million in 2009 from $121 million in2008. More importandy, currendy maturing loans went down to $46 millionfrom $518 million. Hence, First Gen's net income went up by 16% toalmost $17 million. .

EDC remains the biggest investment of First Gen. Since its acquisition in2007, EDC has contributed P2.7 billion in equity in earnings and paid P2.4billion in dividends to First Gen through Red Vulcan.

We remain upbeat on the earnings potential of our power generation unit asit actively participates in the auction of power assets being privatized by thegovernment. Last September 2009, EDC, submitt~d the highest bid for the193 MW Palinpinon and 113 MW Tongonan geothermal power plants. Mostrecendy, it won the bid for the 150 MW Bacon-Manito geothermal complex.

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8 8First Gen plans to spend $1.5 billion for expansion in the next three to fiveyears to enhance its position as a leading IPP in the country. It alsocontinues to explore business opportunities outside the Philippines.

Meralco

Almost six years since Meralco's last rate increase in June 2003 and almosttwo and a half years after it filed its application for the approval of its PBRrates, Meralco's first adjustment under PBR was finally implemented in May2009. The rate adjustment, combined with the reduction in purchased powercost and provisions for refunds fueled the increase in Meralco's net incometo P6.0 billion, higher by 114% compar:ed to the previous year.

Among its operating highlights were: energy sales increased 1.7% to 27,516GWh; total number of customers grew by 3.1 % to 4.7 million; an additional237.4 GWh were recovered from 57 self-generating companies; and systemsloss of 8.61 % is at its lowest level since 1981 and even better than the 9.5%

cap.

The Board of Directors formalized a dividend policy equivalent to 50% ofcore earnings, which may be supplemented by special dividends on a "look-back" basis. In 2009, the First Holdings Group received over P550 millionin cash dividends.

We expect Meralco to post even better earnings this year, through thegrowth in electricity sales and prudence in managing costs.

Manufacturing

First Holdings remains committed to growing its manufacturing business.Through First Philec, we have infused additional investments in First Solar. iRevenues of First Philec reached P4..4 billion in 2009 resulting in a netincome of P56 million. Revenues increased by 74%, while net incomeincreased by 81 %. We expect to see progressive improvement in the top lineas well as bottom line of this sector.

Property Development

Our property businesses outperformed the previous year with theircombined contribqtion of P711 million to First Holdings' income,substantially higher than their combined contribution of P192 million in2008. First Philippine Industrial Park delivered P726 million in net profit orP1.2 billion in revenues, its highest so far. Revenues of Rockwell Land,meanwhile, amounted to P4.1 billion, while its net income reached P634million. Revenue grew by 16%, net income by 5%.

We have increased our investment in property development. We purchasedthe 24.5% stake of Benpres Holdings in Rockwell Land for P1.5 billion,bringing our ownership to 49%. Rockwell Land has consistendy reported

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8 8profit growth, so with our stake now at 49%, we expect an increase in theearnings contribution of our property business.

Infrastructure

First Balfour Inc. and First Philippine Industrial Corp. continue to providestable earning to First Holdings.

For the past two ye.ars, First Balfour Inc. has reported record revenues andreturns. Revenues in 2009 reached P2.5 billion, while net income reachedP138 million. Both revenues and net income exceeded the previous year'srecord highs of P2.1 billion in revenues and P120 million in net income.First Balfour started the year with an order backlog of over P1 billion. Theincrease in infrastructure activities will hopefully drive sustained growth inFirst Balfour.

First Philippine Industrial Corp. (FPIC) registered revenues of P663 millionup from the year-ago level of P616 million. Net income also increased, by13% to P229 million. The top and bottom line growth was reflective of theincrease in white line volume and transport rates. FPIC continues to exploreother business opportunities, while maintaining its standards in providingworld-class pipeline fuel transport services.

Results for first quarter of 2010

As I mentioned earlier, we completed the sale of 6.6% of our investment inMeralco to Beacon Electric on March 30, 2010. First Holdings received apayment of P300 per share or a total price of P22.4 billion. The gain on thesale and mark-to-market accounting treatment of the residual sharesamounted to P23.6 billion. These, combined with lower finance costs andprovision for income taxes, Resulted in the first quarter's net incomeattributable to equity holders of the Parent amounting to P24.6 billion againstthe previous year's P178 million. More importandy, from a net debt of P5.4billion in 2005 which grew to P19 billion in 2007, the parent turned aroundto a net cash position ofP12.3 billion in the first quarter of2010.

Thank you and good afternoon.

PRESENTATION & APPROVAL OF THEMANAGEMENT REPORTS ANDRATIFICATION OF THE BOARD APPROVAL OFTHE AUDITED FINANCIAL STATEMENTS FORTHE PERIOD ENDED DECEMBER 31, 2009

The Chairman said that copies of the management report, which includes the audited

financial statements for the calendar year ending December 31, 2009, were distributed to the

stockholders prior to the meeting. He explained that the Board of Directors approved the

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audited financial statements last April 8, 2010. The Chairman inquired whether there were

questions from the floor.

Mr. Jose J. Leonardo, a stockholder, praised the very good report on the financial

condition of the company. He asked about the possibility of declaring higher cash

dividends. The Chairman said that the company will have to consider first the regular cash

dividends of PI per semester and, depending on circumstances, consider increasing the

same.

As there were no other questions raised, the stockholders, on motion made and duly

seconded, unanimously -

'RESOLVED, That the Board approval of the Audited Financial Statementsof the Corporation for the period ended December 31, 2009, be, as the same hereby is,

confirmed; approved and ratified; and that the management reports for the period ended

December 31,2009, be, as they are hereby approved."

RATIFICATION OF THE ACTS OF THE BOARD,

THE EXECUTIVE COMMITTEE AND OF THE

MANAGEMENT OF THE CORPORATION

On motion made and duly seconded, the following resolution was unanimously

approved by the stockholders:

'RESOLVED, That all resolutions and acts of the Board of Directors and the

Executive Committee as well as the acts and contracts entered into by the Management of

the Corporation during the calendar year ended December 31, 2009 and up to the date of

the meeting, and the Chairman and President's Reports, be, as they are hereby, confirmed,ratified and approved. "

ELECTION OF DIRECTORS

The Secretary informed the Chairman that, according to Article II, Section 3 of the

By-Laws, nominations for the election of Directors by the stockholders shall be submitted in

writing to the Nomination and Election Committee at least 60 days before the scheduled

date of the annual stock4o1ders meeting. Nominations and elections of independent

directors must also comply with Circular No. 16 of the Securities and Exchange

Commission. The Board, as recommended by the Nomination & Election Committee,

received within the said period nominations in favor of the following stockholders as

Directors of the Corporation for the ensuing year:

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" ....8 18

Mr. Augusto Almeda-LopezAmb. Cesar B. Bautista

Amb. Thelmo Y. CunananMr. Jose P. Dejesus

Mr. Peter D. Garrucho, Jr.Mr. Oscar J. Hilado

Mr. Elpidio L. IbanezMr. Eugenio L. Lopez III

Mr. Federico R. LopezMr. Manuel M. LopezMr. Oscar M. Lopez

Chief Justice Artemio V. PanganibanMr. Juan B. Santos

Mr. Ernesto B. Rufino, Jr.Mr. Washington Z. Sycip.

It was advised that the Board of Directors, in its regular meeting on March 4, 2010,

reviewed and favorably passed upon the qualifications and eligibility of the stockholders

nominated as Directors for the ensuing year in accordance with the By-Laws and the

Company's Manual on Corporate Governance; and that Amb. Cesar B. Bautista, Mr. Oscar

J. Hilado, Chief Justice Artemio V. Panganiban, Mr. Juan B. Santos and Mr. Washington Z.

Sycip are being nominated as independent directors.

It was duly moved and seconded that the fifteen stockholders who were nominated

as directors for the ensuing year be declared elected as Directors for the fifteen board seats

of the Corporation.

There being no objection, the Chairman directed the Secretary to cast the votes in

favor of the following stockholders duly nominated as Directors of First Philippine Holdings

Corporation for the ensuing year and until their successors shall have been duly elected and

shall have qualified:Mr. Augusto Almeda-Lopez

Amb. Cesar B. BautistaAmb. Thelmo Y. Cunanan

Mr. Jose P. DejesusMr. Peter D. Garrucho,Jr.

Mr. Oscar J. HiladoMr. Elpidio L. Ibanez

Mr. Eugenio L. Lopez IIIMr. Federico R. LopezMr. Manuel M. LopezMr. Oscar M. Lopez

Chief Justice Artemio V. PanganibanMr. Juan B. Santos

Mr. Ernesto B. Rufino, Jr.Mr. Washington Z. Sycip.

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The Chairman instructed the Secretary to note those proxies which gave particular

votes to certain nominees. It was also noted that Amb. Cesar B. Bautista, Mr. Oscar J.

Hilado, Chief Justice Artemio V. Panganiban, Mr. Juan B. Santos and Mr. Washington Z.

Sycip were duly elected as independent directors.

APPOINTMENT OF EXTERNAL AUDITORS

On motion duly made and seconded, the stockholders ratified the Board approval to

retain Sycip, Gorres, Velayo and Co., Certified Public Accountants, as the Corporation's

external auditors for the ensuing year.

OTHER BUSINESS

Mr. Armando Lardizabal, a stockholder, raised the matter of his stock certificate,

which was allegedly lost while in the mails. The Chairman advised him to go to STSI, the

stock transfer agent, which is in charge of these matters, and to settle the same with the said

company. Mr. Antonio R. Galvez, the General Manager of STSI, advised Mr. Lardizabal to

see him after the meeting to resolve the problem. Mr. Lardizabal thanked the Chairman and

Mr. Galvez.

Another stockholder, Mr. Eddie Dulalia, first congratulated the Board of Directors.

Then he asked about the company's plan over the next two years. The Chairman said that

he will leave that to the next CEO and the Board; however, he said that the company will

continue to be in power generation, and will possibly consider going overseas.

Another stockholder asked what will happen if the Pesident Elect Noynoy Aquino

appoints Mr. Jose P. Dejesus as his cabinet member. Mr. Jose P. Dejesus replied that he is

not in a position to say nothing until such appointment happens; but if it does happen, then

the Board has to elect ano~er member as his replacement.

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ADJOURNMENT

There being no further business to transact, the meeting was, on motion made and

duly seconded, thereupon adjourned,

JIlJ-ENRIQUE I. QUIASON

Secretary

ATTEST:

G~~~~:~~/Chainnan of the Board

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~ First PhilC",ine 8I. Holdings Corporation

8

To whom it may concern:

Enrique I. Quiason, being duly elected and qualified Corporate Secretary of

First Philippine Holdings Corporation, certifies that he has caused the preparation

and sending of notices to all stockholders of the corporation for the Annual

Stockholders Meeting to be held on May 31, 2010 at 3:00 p.m. in accordance with the

By-Laws of the Corporation and the Philippine laws.

Pasig City, May 27, 2010.

8 EN.!ift!o UIASO NCorporate Secretary

a 4th Floor, Benpres Building, Exchange Road cor. Meralco Avenue 1600, Pasig City, Philippines. ...Telephone: (632) 631-80-24, (632) 449-60-00, Fax No.: (632) 631-40-89, P.O. Box No. 12457 Ortigas Center, Paslg City