San Miguel Corporation (SMC), the Philippines' largest food and beverage company, announced that long-term prospects of the Philippine economy are generally positive.

SMC has placed itself in a good position to quickly respond to the opportunities of a foreseen recovery, said Eduardo M. Cojuangco Jr., SMC Chairman, while recently reiterating the Company's strategies for future growth.

For the near-term, Cojuangco is also optimistic that SMC will be able to benefit from improved urban spending as a result of the recovery of the manufacturing and industrial sectors following the continuing demand for exports. He expects that in spite of the Mindanao conflict and a weak agricultural sector, consumer spending will improve for the rest of the year - growing at 3% to 5% over this semester compared to 2.7% in 1999.

The regional financial crisis, observed Cojuangco, has had far less impact on the economy because of the Philippines' stronger macroeconomic fundamentals and the adoption of preventive and corrective measures to minimize the potential damage.

Echoing Cojuangco's view, Ramon S. Ang, SMC Vice Chairman, said that SMC has stayed with its strategies and growth targets outlined earlier. He reaffirmed that over the next two years, SMC projects a revenue growth of as much as 30% to 40% and income growth rates of over 20% per annum.

He recalled that when Cojuangco returned as SMC Chairman in July 1998, he immediately focused on SMC's core businesses and the areas that demanded attention. "The new Chairman came in with an open mind and a more objective view of the businesses involved. He came in at the right time with a strong will to implement the needed reforms," Ang said.

Operationally, these measures included improving the Company's overall cost structure, rationalizing its international operations, expanding the dealership network and improving trade incentives. "We believe that these initiatives have already borne fruit," Ang said. SMC reported an unprecedented increase of more than 63% in income from operations in 1999 to P6.7 billion (1998: P4.1 billion).

This growth momentum has been carried through this year's first semester with San Miguel posting increases in operating profit and net profit of 27% and 26%, respectively.

SMC also hopes to achieve further growth from the expansion of its existing businesses and from acquiring new, inter-related operations like Metro Bottled Water Corporation, Sugarland Beverage Corporation, and the Tasmania-based J. Boag & Son.

The acquisition of Metro Bottled Water and Sugarland gave SMC's subsidiary, La Tondea Distillers Inc., the undisputed leadership in the retail bottled water and juice markets. J. Boag, on the other hand, further enriches San Miguel's beer brand portfolio and provides a strategic fit with SMC's international beer business.

The bulk of new investments that San Miguel is now exploring are in the food businesses. The goal is to transform its existing food operations into a major branded food company. Ang stated, "We intend to leverage our brands to new segments and we have already identified a number of new areas that we intend to get into, including snacks, condiments, and other food-related concerns."

Founded in 1890, San Miguel is the largest food and beverage company listed in S.E. Asia and is active within the brewing and beverages, food and food-related, and packaging areas. San Miguel's ordinary shares trade on the Philippine Stock Exchange and trade in ADR form in the US (each equal to ten SMC Class B common shares). Prices for the ADRs may be accessed on the NASD OTC Bulletin Board under the symbol SMGBY. Quotes for San Miguel ordinary shares may be accessed on Bloomberg under the symbol SMC/B PM and on the Reuter Equities 2000 Service under the symbol SMC.