Energy Development : Clarification of News Article

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 9, 2018

JOSE VALERIANO B. ZUÑO III

OIC-HEAD, Disclosures Department The Philippine Stock Exchange, Inc.

PSE Tower, 28th Street corner 5th Avenue Bonifacio Global City, Taguig City

Dear Mr. Zuño:

We write in compliance with the PSE's request for clarification with respect to the news article entitled "EDC sees flat earnings this year" published in the May 9, 2018 issue of the Business World. The article reported that:

"ENERGY Development Corp. (EDC) expects this year's revenues and profit to be flat, as the Lopez-led company ended the first quarter with a double-digit decline in top-line and bottom line figures.

'We expect, as the units come online, to catch up. But compared to last year - our last year's RNIA (recurring net income attributable to equity holders) was about P8.8 billion… Most likely we'll probably end with the same, more or less, level,' said Erwin O. Avante, EDC vice-president and head for corporate finance.

. . . .

Richard B. Tantoco, EDC president and chief operating officer, said the company would be focused on its geothermal business this year.

'Majority of our investments this year will happen in two areas. One is in our switchyards. We're increasing the seismic specifications across our entire fleet. What we have there still works… As we maintain the assets, we'll put the new ones and then we'll have spares - the old ones,' he said, adding that this will happen this year and next.

'The second one is in the land site mitigation. We're spending this year four times the average of the past 12 years,' he said, citing the latest outlay at P400 million for EDC's Leyte assets.

Mr. Tantoco said the company's foray into solar power would take a pause this year 'because so many people had gotten into it.'

He said investments for wind would also be limited to the maintenance of

the company's concession areas. He noted the price of wind turbines has not gone down 'far enough' to start a viable project without a guaranteed

feed-in-tariff.

EDC has allocated a capital expenditure of P6.1 billion for this year, Mr.

Avante said, adding that the amount is around the same as the previous

year."

. . . . "

We confirm that all statements quoted in the news article are accurate.

Very truly yours,

Ryan Z. Velasco

Head of Investor Relations

& Corporate Information Officer

cc: KATHLENE ANNE F. FAMADICO

OIC - Issuer Compliance and Disclosure Department (ICDD)

Philippine Dealing & Exchange Corp.