Clarification of news article entitled: “EDC expects net income of Php8.8 billion the same as last year”

October 15, 2008

Energy Development Corporation

38th Floor, One Corporate Centre Building, Julia Vargas corner Meralco Avenue Ortigas Center, Pasig 1605, Philippines

Trunklines: +63 (2) 667-7332 (PLDT) / +63 (2) 755-2332 (Globe)

May 13, 2016

JANET A. ENCARNACION

HEAD, Disclosures Department The Philippine Stock Exchange, Inc. Philippine Stock Exchange Plaza

Ayala Triangle, Ayala Avenue, Makati City

Dear Ms. Encarnacion:

We write further to the PSE's request for clarification as regard the news article entitled "EDC expects net income of Php8.8 billion the same as last year " posted in the BusinessMirror (Internet Edition) on the May 12, 2016. The article reported in part that:

"LOPEZ-LED Energy Development Corp. (EDC) said on Thursday it may register flat earnings this year, mainly as a result of the unplanned outage of Unit 2 of the Tongonan geothermal plant.

Erwin Avante, EDC Vice President for corporate finance, said the largest geothermal producer in the country is poised to incur at the end this year the same net income-P8.8 billion-it posted in 2015.

. . . ."

We clarify that flattish year-on-year results at Php8.8 billion for 2016 is a possible scenario, but "not as a result of the unplanned outage of Unit 2 of the Tongonan geothermal plant" considering that the event transpired last 2015. The more likely cause are low electricity spot prices. As explained in the Company's press statement released today (also to the PSE) covering 1Q 2016, the company notes that gains in sales volumes by certain geothermal power plants have been negated by lower spot prices from plants with WESM exposure.