AIA 2012 Philam Life VUL Report Ph

May 2013

Dear Valued Policyholder,

We are pleased to present to you Philam Life’s Variable Unit-Linked (VUL) Fund Annual Report for 2012 containing the performance of Philam Life’s various VUL funds amidst a favorable economic environment and prevailing low interest rates.

As a market overview, the Philippine economy performed very well in 2012 with GDP growth at 6.6% from 3.9% in 2011. The Philippines had the second fastest growth in Asia next to China. Economic growth can be attributed to strong consumer spending, recovery of the export sector, stable OFW remittances, and improved sovereign credit rating which in turn can translate into more investments in the country.

Inflation remained within BSP’s range averaging at 3.1%. The peso was also the second best performing currency in Asia as it strengthened by 6.7% and ended at PHP41.05/ USD. Prudent monetary policies positively a�ected the economy even as the local interest rates continued to trend downwards settling at a low of 3.5% by yearend.

Amidst the prevailing low interest rate environment, Philam Life’s VUL funds registered the following returns in 2012: 24.4% for Philam Life Equity Fund (PHP), 23.9% for Philam Life Balanced Fund (PHP), 7.3% for Philam Life Fixed Income Fund (PHP), 10.1% for Philam Life Dollar Bond Fund (USD), and 11.7% for Philam Life Global Bond Fund (USD).

Overall, 2012 was a good year for Philam Life, as we capitalized on our growth momentum from 2011. Gross Premiums amounted to PHP15.4 billion, an increase of 13% from previous year. Total Assets stood at PHP193.2 billion, 9.4% growth vs. last year. Net Investment Income grew by 4.2% to PHP11.8 billion. Total Revenue was at PHP30.2 billion, a 2.7% increase over previous year. Net Insurance Benefits and Claims payments totaled PHP18.7 billion.

In 2013, expect a bigger and bolder Philam Life as the company embarks on strategies to ensure its competitiveness in today’s business environment. These include building a premiere agency force; growing bancassurance; developing more products and services that cater to the changing needs of our customers, and moving our o�ces to progressive business districts around the country.

Given the country’s growing economy, it is important that you trust your future with the country’s premier life insurance company, Philam Life. Contact your financial advisor to see how Philam Life can go even further in empowering you to achieve financial security and prosperity.

Please do not hesitate to call us at (+632) 528-2000 or e-mail us at [email protected]. You may also visit our website at philamlife.com or go to any Philam Life branch o�ce nationwide for assistance.

Very truly yours,

REX A. MENDOZAPresident and CEO

At the start of the year, there was optimism on global economic growth as data from the United States indicated recovery. However, this was proven temporary as market sentiment was dampened by renewed concerns over Europe’s worsening debt crisis, slowing economies and signs of weakness in China. Political issues arising from the U.S. presidential election and fiscal cli� concerns, together with new leadership in China, also provided uncertainty on future policy conviction. As economic growth undershot expectations, major central banks pushed for more supportive policy led by the U.S. Fed’s third round of quantitative easing and the European Central Bank’s (ECB) new Outright Monetary Transactions (OMT) instrument. Towards the end of the year, a stable but low interest environment persisted with lower risk premium on the back of improving economic situations in Europe and China .

Despite global markets’ anxiety over Europe initially and over the U.S. towards year-end, both equity and bond markets closed the year higher as the S&P500 and Dow Index increased by 11% and 6%, respectively, while the 10-year U.S. Treasury notes tightened further by 19bps to yield 1.76%.

Meanwhile, the Philippine economy, which proved its resilience to the lackluster global economy, ended on a high note in 2012 as Gross Domestic Product (GDP) grew 6.6% from 3.9% in 2011. Being the second fastest growing economy in Asia, the Philippines’ outperformance was mainly driven by strong consumption, accelerated government spending and sustained recovery in exports. Overseas Filipino remittance flows continued to boost consumer demand as it rose 6.3%, reaching USD21.4 billion for the full year and exceeding government forecast of 5.0%. Increased trust in the Aquino administration also supported an upbeat business and consumer sentiment for the year. Public spending and tax collection e�ciency has dramatically increased since the President assumed o�ce in 2010. As a result, even with sustained public spending to support domestic demand, the government has reduced its national debt steadily. The 2012 budget shortfall recorded PHP243 billion which is 13% lower than the PHP279 billion target. With these developments and positive credit rating upgrades from S&P and Moody’s to just one notch below investment grade, the Philippines is well on its way to be awarded an investment grade status in 2013.

Aside from e�ective fiscal management, the Bangko Sentral ng Pilipinas’ (BSP) employment of prudent monetary policy tools also bolstered the economy’s stellar performance. With the BSP’s commitment to stimulate economic growth, it reduced its policy rate by 100bps to settle at 3.5% by yearend. Together with a benign inflation environment, this move helped bu�er domestic demand against global economic headwinds and kept the peso appreciation manageable. Inflation remained within the BSP’s target range in 2012 as it averaged 3.12%. Meanwhile, the peso was the second best performing currency in Asia as it strengthened 6.73% to end the year at PHP41.05/USD.

Philam Life Variable Funds

GENERAL MARKET REVIEW LOCAL MARKETEquities Market

The PSEi started the year strong as market sentiment was upbeat despite the ever-present headwinds from the global economy. However, the mood was dampened because of renewed fears regarding the possible impact of the persistent economic problems of Greece to the Eurozone’s already anemic situation. Nonetheless, PSEi closed 2012 at 5,813, a 33% gain for the year. Foreigners bought USD1.95 billion in PH stocks (net) for the year. Average daily traded value rose 38% to an unprecedented USD159 million from USD115 million in 2011.

2012 saw the addition of Petron and deletion of Cebu Pacific in the index. 24 index members ended the year in the green while 7 declined. The index’ leading performers were Robinsons Land Corp. (+83.63%), Universal Robina Corp. (+74.69%), Ayala Land Inc. (+74.47%) and Bank of the Philippine Islands (+72.10%).

The market saw positioning in Construction/Cement and Media in December, in light of expected ramp-ups in Public-Private Partnership (PPP) spending and media coverage of the upcoming congressional elections.

We see the Index targeting 7,370 by year-end, assuming that: (1.) real GDP growth is at least 5.7% for the year, (2.) inflation accelerates mildly, (3.) interest rates decline slightly from end-2012 levels, (4.) dividend payouts increase somewhat, and (5.) PH’s risk premium declines further as the country aligns with rating agencies’ expectations.

Bond Market

Local interest rates continued to trend lower in 2012 as market liquidity and positive sentiment lifted peso bond prices to record highs. By managing its debt maturity profile, the Bureau of Treasury (BTr) was able to achieve improved liquidity and pricing in long-term peso bonds. The debut of 15-, 20- and 25-year Retail Treasury Bonds (RTBs) in 2012 has given retail investors access to long-term higher-yielding investment alternatives amid a low interest rate environment. In February, the 15- and 20-year RTBs were issued at coupon rates of 5.375% and 5.875%, respectively, while the 25-year RTB was issued in November at a coupon rate of 6.125%. Amid overwhelming demand, the government was able to raise PHP367.796 billion from both auctions.

With benign inflation and the BSP’s reduction in its policy rates, more investors were compelled to shift to government bonds. At the close of the year, the short-, intermediate-, and long-term peso yields have declined by an average of 111.21bps, 96.83bps and 76.80bps from year ago levels, respectively. The 1-year benchmark yield ended the year at 0.9885%, 5-year benchmark yield at 4.1058% and the 10-year benchmark yield at 4.40%.

In line with e�orts to create an inter-ASEAN trading platform, the country’s Capital Market Development Council convened financial sector representatives to identify reforms needed for the local debt market. Among the initiatives identified was the unification of taxation of government bonds by adopting a single price convention that will allow tax-exempt bond holders to trade with non-tax exempt investors, thereby enhancing liquidity and improving market pricing. Finalization of rules has been deferred indefinitely, though, until major issues such as portfolio valuation have been resolved.

GLOBAL MARKETS

Europe was on everyone’s mind as we entered the year as Greece, after much back and forth negotiations among European finance ministers, managed to get a bailout early in the year. Concerns on the Eurozone flared up once again in the 2nd quarter as Italian and Spanish yields soared under pressure fueling anxiety about their ability to refinance their debt and adding pressure to the European financial crisis. To turn the tide, ECB President Mario Draghi announced an unlimited bond purchase program to help ease borrowing costs for Spain and Italy. This rhetoric stemmed further worries about refinancing costs of peripheral European countries and helped abate the Euro crisis.

Aside from the ECB, several central banks (Bank of Japan, Federal Reserve, Bank of Canada, Bank of England, etc.) voiced out pronouncements that they stand ready to take steps to contain any crisis which may cause global growth to falter. Such joint rhetoric reassured investors that central banks were willing and able to step in to provide growth stimuli to the global economy if needed.

Finally, the Federal Reserve introduced several new measures in the past year to continue to support economic growth, most notably a third round of its open-ended Quantitative Easing (QE) program. This round of QE though, unlike the previous two, started out with purchases in mortgage-backed securities which helped bring down mortgage costs, and was further supplemented at the end of the year with increased purchases of U.S. Treasuries. Another measure the Fed introduced in line with QE3 was the setting of economic indicator thresholds – 6.5% unemployment and inflation below 2.5% – which have to be crossed to signal any impending future rate hikes.

As a result of continued monetary easing by global central banks, Emerging Markets (EM) sovereign debt performed well as the JP Morgan Emerging Bond Index gained 12% for the year. Spreads continued to tighten as investors searched for return in the low-yield environment. Asian High Grade debt performed as well, as the HSBC Asian High Grade Bond Index grew by 11% for the year while Asian High Yield debt outperformed its EM counterpart by growing 18% for the year. Global monetary easing had a great impact on fund flows as seen by EM hard currency bond flows for 2012 which surpassed the previous year and was the highest level since the data started recording at USD36 billion. EM local currency flows attracted sizable inflows at USD15 billion. Even developed market bond funds were strong in 2012 attracting USD418 billion.

Moving to 2013, we expect risk appetite to improve as global economic growth modestly picks up. In this largely risk-o� scenario, we expect that the ongoing search for yield to be more favorable to BBB/BB, high-yield (HY) credits. Bond returns would likely come from yield accruals rather than significant capital gains. The fund strategy is to remain overweight in Asia, and to shorten duration to reduce the impact of a possible steepening in the yield curve.

FUND MANAGERS

Philam Life’s variable life funds are managed by Philam Life’s team of investment professionals who have 20 to 30 years of experience and expertise in the field of fund management. As of December 31, 2012 total assets under management reached over PHP 13.3 billion, excluding those of other Philam a�liates. Philam Life combines its expertise with the strength of its senior management to manage portfolios e�ectively in order to achieve favorable returns.

Financial Statement As of December 31, 2012 STATEMENT OF ASSETS AND LIABILITIES

ASSETSCash and cash equivalentsFinancial assets at FVTPL*Loans and receivablesAccrued incomeOther Assets-net

LIABILITIESAccounts payable and accrued expenseOther Liabilities-net

Net Asset Value (NAV)

ASSETSFinancial assets at FVTPL*




265,480,108 1,631,687,832

289,675,556 32,463,180

524,958

2,219,831,633

3,574,511 7,429,652

11,004,163

2,208,827,471

1,593,789

1,593,789

508,160,800

508,160,800

Philam Life Fixed Income Fund

Philam Life Peso Variable Funds in PHP

PAMI Philam Bond Fund

Growth Invest Tr. 1

2,366,527,708 4,858,805,467

- 6,614,651

18,445,463

7,250,393,289

73,543,383 21,443,978

94,987,361

7,155,405,928

24,836,216

24,836,216

214,647,780

214,647,780

Philam Life Equity Fund

677,769,837 2,271,169,775

154,657,778 4,864,254

112,229

3,108,573,873

23,727,006 7,483,277

31,210,283

3,077,363,590

3,045,559

3,045,559

54,797,750

54,797,750

Philam Life Balanced Fund

PAMI Philam Strategic Growth Fund PAMI Philam Fund

Growth Invest Tr. 2 Growth Invest Tr. 3

*Fair Value Through Profit or Loss

Financial Statement As of December 31, 2012 STATEMENT OF ASSETS AND LIABILITIES

Philam Life Dollar Variable Funds in USD

ASSETSCash and cash equivalentsFinancial assets at FVTPL*Loans and receivablesAccrued incomeOther Assets-net

LIABILITIESAccounts payable and accrued expenseOther Liabilities-net






$8,732,237

$8,732,237

$3,954,935

$3,954,935

Philam Life Dollar Bond Fund

Winning Edge Tr. 1

Asia’s Best Tr. 1

$4,617,585

$4,617,585

$4,066,596

$4,066,596

Philam Life Global Bond Fund

$6,025,945

$6,025,945

$9,561,683

$9,561,683

High-Water Mark Fund 2019

Winning Edge Tr. 2Winning Edge Tr. 3

(Emerging Markets)

Asia’s Best Tr. 2

*Fair Value Through Profit or Loss

$7,981,950 65,880,162

- 991,979 749,946

$75,604,037

90,734 1,197,037

$1,287,771

$74,316,266

$3,110,026 8,968,722

- 91,117

148,764

$12,318,629

19,057 33,343

$52,400

$12,266,229

Philam Life Fixed Income Fund Fund Inception Date: November 10, 2004

The Philam Life Fixed Income Fund (PFIF) is a PHP-denominated investment fund created for variable life insurance contracts issued by The Philippine American Life and General Insurance Company (Philam Life). It is an investment option for the variable life policyholder with a preference for investing in high-quality interest-bearing debt instruments that present low to moderate levels of risk. The investment objective of the Philam Life Fixed Income Fund is to provide stable income over the medium- to long-term, and preserve capital by investing primarily in PHP - denominated fixed-income securities issued by the government and reputable corporate issuers.

FUND PERFORMANCE*

2012 Return 7.37%2011 Return 11.05% 2010 Return 10.46% 2009 Return 7.45% 2008 Return -1.92% 2007 Return 1.11% 2006 Return 17.88% 2005 Return 16.04% 3 Year Return (annualized as of Dec 31, 2012) 9.62% 5 Year Return (annualized as of Dec 31, 2012) 6.78% Return since Inception (as of Dec 31, 2012) 92.67%* Fund returns are calculated based on Net Asset Value per Unit Past performance is not indicative of future performance.

PORTFOLIO STATISTICS (as of Dec 31, 2012)

Net Asset Value (NAV in PHP)* 2,208,827,471**Net Asset Value per Unit (NAVPU) 1.9269**Weighted Duration (in years) 8.59 Weighted Tenor/Maturity (in years) 13.64Weighted Average YTM 5.58%* NAV is net of 2% fund management charge, transaction costs, and audit fees. ** Based on Audited Financial Statement

PORTFOLIO MIX* (as of Dec 31, 2012)

Cash & Cash Equivalents 11.91% Philippine Issued Peso Government Bonds 74.20% Corporate Securities 13.89%* Excluding accrued income

FIXED INCOME SECURITIES (as of Dec 31, 2012)

Issue Maturity % of Portfolio

PH Issued PHP Govt Bonds 7/19/2031 26.55%PH Issued PHP Govt Bonds 10/24/1937 16.17%PH Issued PHP Govt Bonds 1/19/2022 14.47%PH Issued PHP Govt Bonds 10/20/2025 4.09%SM Prime FRCN 4/14/2019 4.08%Ayala Corp FRCN 2/15/2018 3.26%Smart Comm FRCN 3/19/2022 3.01%PH Issued PHP Govt Bonds 1/19/2026 2.39%PH Issued PHP Govt Bonds 5/27/2030 2.12%PH Issued PHP Govt Bonds 2/20/2023 1.90%

FRCN - Fixed Rate Corporate Note

RETURN SINCE INCEPTION*

* Fund returns are calculated based on Net Asset Value per Unit

Philam Life Equity Fund Fund Inception Date: November 10, 2004

The Philam Life Equity Fund (PEF) is a PHP-denominated investment fund created for variable life insurance contracts issued by The Philippine American Life and General Insurance Company (Philam Life). This investment option is for the variable life policyholder with an investment objective of capital appreciation over a long-term investment horizon, and the risk appetite for the stock market. The investment objective of the Philam Life Equity Fund is to achieve capital growth by investing in an e�cient and diversified portfolio of predominantly growth companies while including appropriate value stocks.

FUND PERFORMANCE*2012 Return 24.44%2011 Return 0.31%2010 Return 49.15%2009 Return 41.47%2008 Return -36.97%2007 Return 19.56%2006 Return 40.97%2005 Return 12.54%3 Year Return (annualized as of Dec 31, 2012) 23.02%5 Year Return (annualized as of Dec 31, 2012) 10.67%Return since Inception (as of Dec 31, 2012) 218.31%* Fund returns are calculated based on Net Asset Value per Unit Past performance is not indicative of future performance.


Net Asset Value (NAV in PHP)* 7,155,405,928** Net Asset Value per Unit (NAVPU) 3.1834** * NAV is net of 2% fund management charge, transaction costs, and audit fees. ** Based on Audited Financial Statement


Cash & Cash Equivalents 32.75%Common Stocks 67.25%* Excluding accrued income

COMMON STOCKS (as of Dec 31, 2012)

Issue % of PortfolioFirst Gen Corporation 5.88%JG Summit Holdings Inc 5.43%BDO Unibank Inc 4.82%Metro Pacific Investments Co 4.54%SM Investments Corporation 4.09%Phil Long Distance Tel Co 3.70%GT Capital Holdings Inc 3.68%DMCI Holdings Inc 2.69%Nickel Asia Corporation 2.65%Energy Development Corp 2.48%

COMMON STOCKS by SECTOR (as of Dec 31, 2012) Sector % of PortfolioFinancials 23.56%Utilities 14.87%Industrials 15.21%Telecommunication Services 4.82%Materials 5.79%Energy 2.68%Consumer Discretionary 0.31%



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Philam Life Balanced Fund

Fund Inception Date: May 22, 2007

The Philam Life Balanced Fund (PBAL) is a PHP-denominated investment fund created for variable life insurance contracts issued by The Philippine American Life and General Insurance Company (Philam Life). This investment option is for the variable life policyholder with an investment objective of long-term capital appreciation by investing primarily in PHP-denominated equities, equity-related securities and debt securities.

FUND PERFORMANCE*2012 Return 23.90%2011 Return 1.34%2010 Return 41.93%2009 Return 34.07%2008 Return -30.39%3 Year Return (annualized as of Dec 31, 2012) 21.24%5 Year Return (annualized as of Dec 31, 2012) 10.71%Return since Inception (as of Dec 31, 2012) 68.09%* Fund returns are calculated based on Net Asset Value per Unit Past performance is not indicative of future performance.


Net Asset Value (NAV in PHP)* 3,077,363,590**Net Asset Value per Unit (NAVPU) 1.6809*** NAV is net of 2% fund management charge, transaction costs, and audit fees. ** Based on Audited Financial Statement


Cash & Cash Equivalents 21.81%Philippine Issued Peso Government Bonds 2.39%Corporate Securities 4.97%Common Stocks 70.83%* Excluding accrued income


Issue % of PortfolioFirst Gen Corporation 6.12%JG Summit Holdings Inc 4.93%BDO Unibank Inc 4.89%SM Investments Corporation 3.91%Metro Pacific Investments Co 3.80%Phil Long Distance Tel Co 3.50%DMCI Holdings Inc 3.17%GT Capital Holdings Inc 3.14%Nickel Asia Corporation 2.83%Energy Development Corp 2.79%

FIXED INCOME SECURITIES (as of Dec 31, 2012) Sector % of PortfolioAyala Corp FRCN 2/15/2018 2.46%PH Issued PHP Govt Bonds 2/20/2023 1.36%Smart Comm FRCN 3/19/2022 1.06%SM Inv FRCN 1/4/2018 0.97%PH Issued PHP Govt Bonds 10/20/2025 0.48%PH Issued PHP Govt Bonds 2/19/2019 0.39%SM Prime FRCN 4/14/2019 0.29%Universal Robina FRCN 3/27/2014 0.19%PLDT FRCN 5/29/2023 0.16%




Philam Life Dollar Bond Fund Fund Inception Date: July 12, 2005

The Philam Life Dollar Bond Fund (PALDBF) is a USD-denominated investment fund created for dollar variable life insurance contracts issued by The Philippine American Life and General Insurance Company (Philam Life). The Philam Life Dollar Bond Fund is an investment option for the dollar variable life policyholder with a preference for investing in Philippine government and corporate fixed-income securities. The Fund aims to provide income growth while maintaining moderate liquidity over the medium- to long-term investment horizon.

FUND PERFORMANCE*2012 Return 10.14%2011 Return 6.60%2010 Return 9.55%2009 Return 15.29%2008 Return -2.43%2007 Return 5.53%2006 Return 17.43%3 Year Return (annualized as of Dec 31, 2012) 8.75%5 Year Return (annualized as of Dec 31, 2012) 7.67%Return since Inception (as of Dec 31, 2012) 103.40%

* Fund returns are calculated based on Net Asset Value per UnitPast performance is not indicative of future performance.


Net Asset Value (NAV in USD)* 74,316,266**Net Asset Value per Unit (NAVPU) 2.0352**Weighted Duration (in years) 7.87Weighted Tenor/Maturity (in years) 11.39 Weighted Average YTM 2.55%

* NAV is net of 2% fund management charge, transaction costs, and audit fees. ** Based on Audited Financial Statement


Cash & Cash Equivalents 10.81%Philippine Issued Dollar Government Bonds 86.52%US Treasury Notes 2.67%* Excluding accrued income

PHILIPPINE SOVEREIGN SECURITIES (as of Dec 31, 2012) Issue Maturity % of Portfolio

PH Issued US$ Govt Bonds 6/17/2019 18.65%PH Issued US$ Govt Bonds 1/14/2031 11.79%PH Issued US$ Govt Bonds 2/2/2030 9.95%PH Issued US$ Govt Bonds 1/13/2037 9.84%PH Issued US$ Govt Bonds 1/20/2020 9.67%PH Issued US$ Govt Bonds 3/30/2026 8.55%PH Issued US$ Govt Bonds 1/15/2021 6.09%PH Issued US$ Govt Bonds 10/23/2034 5.69%PH Issued US$ Govt Bonds 3/16/2025 2.98%


* Fund returns are calculated based on Net Asset Value per Unit-35%-25%-15%

-5%5%

15%25%35%45%55%65%

May

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Philam Life Global Bond Fund

Fund Inception Date: July 12, 2005

The Philam Life Global Bond Fund (PALGBF) is a USD-denominated investment fund created specifically for dollar variable life insurance contracts issued by The Philippine American Life and General Insurance Company (Philam Life). The Philam Life Global Bond Fund is an investment option for the dollar variable life policyholder with a preference for investing in high-quality, investment-grade fixed-income securities with low to moderate levels of risk over a medium- to long-term investment horizon. The Fund aims to preserve capital and provide stable income growth over the medium- to long-term.

FUND PERFORMANCE*2012 Return 11.70% 2011 Return 2.81% 2010 Return 6.33% 2009 Return 9.08% 2008 Return -4.96% 2007 Return 3.49% 2006 Return 11.20% 3 Year Return (annualized as of Dec 31, 2012) 6.88% 5 Year Return (annualized as of Dec 31, 2012) 4.83% Return since Inception (as of Dec 31, 2012) 55.04%



Net Asset Value (NAV in USD)* 12,266,229**Net Asset Value per Unit (NAVPU) 1.5504**Weighted Duration (in years) 4.85 Weighted Tenor/Maturity (in years) 7.76 Weighted Average YTM 2.36%

* NAV is net of 2% fund management charge, transaction costs, and audit fees. ** Based on Audited Financial Statement


Cash & Cash Equivalents 25.75%Foreign Corporate Securities 74.25%

* Excluding accrued income

FOREIGN SECURITIES (as of Dec 31, 2012)

Issue Maturity % of PortfolioReliance Hdg USA 2/14/2012 4.59%Sinopec Grp CHN 5/17/2042 2.83%Tenaga Nasional 11/1/2025 2.80%Hutch Whampoa Ltd 12/29/2049 2.63%Korea Gas Corp 1/20/2042 2.22%CNPC 4/28/2041 2.12%Kazmunaigaz 4/9/2021 2.02%Export-Import Bank Korea 4/11/2022 1.93%CNOOC Finance 5/2/2042 1.91%Hutch Whampoa Ltd 1/13/2022 1.84%



PAMI Philam Bond Fund

Fund Inception Date: August 1, 2012

The PAMI Philam Bond Fund is a PHP-denominated single asset fund invested in Philam Asset Management Inc.’s PAMI Bond Fund (PBF). PBF is an open-end mutual fund with a portfolio composed of government securities and high-grade commercial papers. The investment focus of the fund is capital preservation. It is a first rate-pick for programmed capital build-up that can be used for retirement, education, incentive programs, and other individual or corporate financial purposes.

FUND PERFORMANCE*

Return since Inception (as of Dec 31, 2012) 4.60%

* Fund returns are calculated based on Net Asset Value per Unit Past performance is not indicative of future performance.


Net Asset Value (NAV in PHP) 1,593,789**Net Asset Value per Unit (NAVPU) 3.7202** ** Based on Audited Financial Statement



PH Issued PHP Govt Bonds 7/19/2031 12.45%PH Issued PHP Govt Bonds 2/1/2032 12.36%PH Issued PHP Govt Bonds 10/20/2021 10.82%PH Issued PHP Govt Bonds 12/16/2035 9.77%PH Issued PHP Govt Bonds 10/24/2037 9.23%PH Issued PHP Govt Bonds 4/28/2021 6.23%PH Issued PHP Govt Bonds 12/16/2020 4.82%PH Issued PHP Govt Bonds 11/24/2021 4.81%SM Prime FRCN 8/21/2021 4.35%PH Issued PHP Govt Bonds 9/29/2036 4.02%



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PAMI Philam Strategic Growth Fund Fund Inception Date: August 1, 2012

The PAMI Philam Strategic Growth Fund is a PHP-denominated single asset fund invested in Philam Asset Management Inc.’s PAMI Strategic Growth Fund (PSGF). It is a long-term investment that gives superior capital growth through a professionally managed stock portfolio. PSGF is an equity fund invested in listed or soon to be listed issues in the Philippine Stock Exchange. It is the ideal fund for people who are after capital growth but do not have the expertise or the resources to develop and manage a highly diversified equity portfolio.

FUND PERFORMANCE*




Net Asset Value (NAV in PHP) 24,836,216**Net Asset Value per Unit (NAVPU) 501.6100**

** Based on Audited Financial Statement


Issue % of Portfolio

First Gen Corporation 7.05%JG Summit Holdings Inc 5.49%BDO Unibank Inc 4.60%Metro Pacific Investments Co 4.43%Phil Long Distance Tel Co 3.96%Puregold Price Club Inc 3.82%GT Capital Holdings Inc 3.79%Nickel Asia Corporation 3.76%SM Investments Corporation 3.63%Robinson’s Land Co 3.43%



PAMI Philam Fund Fund Inception Date: August 1, 2012

The PAMI Philam Fund is a PHP-denominated single asset fund invested in Philam Asset Management Inc.’s PAMI Fund (PFI). It is a balanced fund that provides its shareholders access to the stock market while tempering the market’s volatility with a steady stream of interest income. The fund’s portfolio is a healthy balance between blue chip stocks and fixed income instruments. It is an ideal vehicle for moderate investors who want to avail of the profit opportunities of the stock market but are not totally comfortable with the risks involved in equity investments.

FUND PERFORMANCE*




Net Asset Value (NAV in PHP) 3,045,559**Net Asset Value per Unit (NAVPU) 16.2122**

** Based on Audited Financial Statement


Issue % of Portfolio

First Gen Corporation 8.85%JG Summit Holdings Inc 6.73%Metro Pacific Investments Co 6.26%Phil Long Distance Tel Co 5.75%Nickel Asia Corporation 4.83%Puregold Price Club Inc 4.82%GT Capital Holdings Inc 4.76%BDO Unibank Inc 4.59%SM Investments Corporation 4.30%Nihao Mineral Resources 4.16%



PH Issued PHP Govt Bonds 10/24/2037 3.13%PH Issued PHP Govt Bonds 9/4/2016 1.14%SM Inv FRCN 1/4/2018 0.98%PH Issued PHP Govt Bonds 12/16/2020 0.95%PH Issued PHP Govt Bonds 2/18/2020 0.94%PH Issued PHP Govt Bonds 3/31/2017 0.87%PH Issued PHP Govt Bonds 8/19/2017 0.87%Ayala Corp FRCN 2/15/2018 0.59%PH Issued PHP Govt Bonds 1/27/2016 0.43%




-4%

-2%

0%

2%

4%

Aug-

12

Sep-

12

Nov-

12

Dec-

12

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-2%

0%

2%

4%

Aug-

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12

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12

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12

Philam Life High-Water Mark Fund 2019 (or Prime Yield) Fund Inception Date: May 13, 2009

The Philam Life High-Water Mark (HWM) Fund 2019 is a USD-denominated single-asset fund that locks in the highest NAVPU of the fund at maturity. The fund is invested in a 10-year structured note issued by Barclays Bank PLC, which is exposed to various asset classes and markets, such as global and emerging market equities and bonds. On a daily basis, the note allocates its exposure between risky and risk-free assets to maximize returns while ensuring that the highest NAVPU is protected at maturity.

FUND PERFORMANCE*

2012 Return 5.06% 2011 Return 2.59% 2010 Return 1.96% 3 Year Return (annualized as of Dec 31, 2012) 3.19% Return since Inception (as of Dec 31, 2012) 27.33%



Net Asset Value (NAV in USD)* 9,561,683**Net Asset Value per Unit (NAVPU) 1.2733**Remaining Life (in years) 6.37 * NAV is net of 2.2% fund management charge** Based on Audited Financial Statement



Philam Life Principal-Protected Fund(or AIG Winning Edge Tr. 1)Fund Inception Date: June 3, 2008

The Philam Life Principal-Protected Fund is a USD-denominated single-asset fund invested in an index-linked structured note issued by HSBC Bank PLC. The structured note provides 100% principal protection at maturity and a participation in the performance of Standard and Poor’s (S&P) 500 and S&P BRIC (Brazil Russia India China) 40 indices.

FUND PERFORMANCE*

2012 Return -1.28%2011 Return 3.95%2010 Return 5.47%2009 Return -3.34%3 Year Return (annualized as of Dec 31, 2012) 2.67%Return since Inception (as of Dec 31, 2012) 2.65%



Net Asset Value (NAV in USD)* 8,732,237** Net Asset Value per Unit (NAVPU) 1.0265** Remaining Life (in years) 3.42 * NAV is net of 2.5% administrative charge** Based on Audited Financial Statement



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5%

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Jun-

08

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08

Jun-

09

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09

Jun-

10

Dec-

10

Jun-

11

Dec-

11

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12

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12

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May

-09

Oct-

09

Feb-

10

Jun-

10

Nov-

10

Mar

-11

Jul-

11

Nov-

11

Apr-

12

Aug-

12

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12

Peak Return at 28.17% on 12/07/2012

Philam Life Principal-Protected Fund 2 (or AIG Winning Edge Tr. 2) Fund Inception Date: July 17, 2008

The Philam Life Principal-Protected Fund is a USD-denominated single-asset fund invested in an index-linked structured note issued by HSBC Bank PLC. The structured note provides 100% principal protection at maturity and a participation in the performance of Standard and Poor’s (S&P) 500 and S&P BRIC (Brazil Russia India China) 40 indices.

FUND PERFORMANCE*

2012 Return -0.84%2011 Return 2.89%2010 Return 5.67%2009 Return -1.64%3 Year Return (annualized as of Dec 31, 2012) 2.54%Return since Inception (as of Dec 31, 2012) 4.16%



Net Asset Value (NAV in USD)* 4,617,585** Net Asset Value per Unit (NAVPU) 1.0416** Remaining Life (in years) 3.54

* NAV is net of 2.5% administrative charge** Based on Audited Financial Statement



Philam Life Principal-Protected Emerging Markets Fund (or AIG Winning Edge Tr. 3)

Fund Inception Date: September 17, 2008

The Philam Life Principa l- Protected Emerging Markets Fund is a USD - denominated single-asset fund invested in an index-linked structured note issued by Allegro Investment Corp SA. Allegro Investment Corp SA is a special purpose limited liability company, whose notes are guaranteed by Citigroup Inc. The structured note provides 100% principal protection at maturity and a participation in the performance of Standard and Poor’s BRIC (Brazil Russia India China) 40 and MSCI Emerging Market Exchange-Traded Fund (EEM ETF).

FUND PERFORMANCE*

2012 Return 5.53%2011 Return -3.33%2010 Return 7.59%2009 Return 7.65%3 Year Return (annualized as of Dec 31, 2012) 3.15%Return since Inception (as of Dec 31, 2012) 2.99%



Net Asset Value (NAV in USD)* 6,025,945** Net Asset Value per Unit (NAVPU) 1.0299** Remaining Life (in years) 0.71 * NAV is net of 2.5% administrative charge** Based on Audited Financial Statement



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5%

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08

Jan-

09

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09

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09

May

-10

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10

Mar

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11

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12

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12

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Feb-

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Apr-

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10

Jan-

11

Jun-

11

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11

Mar

-12

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12

Philam Life Asia’s Best Fund 1 Fund Inception Date: July 12, 2011

The Philam Life Asia’s Best Fund is a USD-denominated single-asset fund invested in a structured note issued by Citigroup Funding Inc. The structured note protects at least 80% of the principal at maturity and provides a participation in the performance of the Hang Seng China Enterprises Index (HSCEI Index) and India’s equity index (NIFTY Index).

FUND PERFORMANCE*

2012 Return 15.17%Return since Inception (as of Dec 31, 2012) -6.17% * Fund returns are calculated based on Net Asset Value per Unit

Past performance is not indicative of future performance.


Net Asset Value (NAV in USD)* 3,954,935**Net Asset Value per Unit (NAVPU) 0.9383**Remaining Life (in years) 4.53 * NAV is net of 3.0% administrative charge** Based on Audited Financial Statement



Philam Life Asia’s Best Fund 2

Fund Inception Date: December 2, 2011

The Philam Life Asia’s Best Fund is a USD-denominated single-asset fund invested in a structured note issued by Citigroup Funding Inc. The structured note protects at least 80% of the principal at maturity and provides a participation in the performance of the Hang Seng China Enterprises Index (HSCEI Index) and India’s equity index (NIFTY Index).

FUND PERFORMANCE*

2012 Return 13.38% Return since Inception (as of Dec 31, 2012) 5.08% * Fund returns are calculated based on Net Asset Value per Unit Past performance is not indicative of future performance.


Net Asset Value (NAV in USD)* 4,066,596**Net Asset Value per Unit (NAVPU) 1.0508**Remaining Life (in years) 4.92 * NAV is net of 3.0% administrative charge** Based on Audited Financial Statement



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Jul-

11

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11

Nov-

11

Dec-

11

Feb-

12

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12

May

-12

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12

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12

Oct-

12

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12

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5%

15%

Dec-

11

Jan-

12

Feb-

12

Mar

-12

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12

May

-12

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12

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12

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12

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12

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12

The Philam Life Growth Invest Fund is a PHP-denominated single-asset fund invested in a structured note issued by ING Bank NV. The structured note protects at least 80% of the principal at maturity and provides a participation in the performance of four exchange-traded funds related to commodity-related equities and Chinese equities, namely 1.) Market Vectors Agribusiness ETF (MOO US Equity), 2.) Energy Select Sector SPDR Fund (XLE US), 3.) iShares FTSE/Xinhua A50 China Index ETF (2823 HK Equity), and 4.) Market Vectors Gold Miners ETF (GDX US Equity).

FUND PERFORMANCE*

2012 Return 1.92% Return since Inception (as of Dec 31, 2012) -11.90% * Fund returns are calculated based on Net Asset Value per Unit Past performance is not indicative of future performance.


Net Asset Value (NAV in PHP)* 508,160,800**Net Asset Value per Unit (NAVPU) 0.8810**Remaining Life (in years) 4.75 * NAV is net of 3.0% administrative charge** Based on Audited Financial Statement




FUND PERFORMANCE*

Return since Inception (as of Dec 31, 2012) -13.64%



Net Asset Value (NAV in PHP)* 214,647,780**Net Asset Value per Unit (NAVPU) 0.8636**Remaining Life (in years) 5.03 * NAV is net of 3.0% administrative charge** Based on Audited Financial Statement



Philam Life Growth Invest Fund 1 Fund Inception Date: September 28, 2011

Philam Life Growth Invest Fund 2 Fund Inception Date: January 11, 2012

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Sep-

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11

Mar

-12

Jun-

12

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12

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12

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FUND PERFORMANCE*

Return since Inception (as of Dec 31, 2012) -9.50%



Net Asset Value (NAV in PHP)* 54,797,750**Net Asset Value per Unit (NAVPU) 0.9050**Remaining Life (in years) 5.53

* NAV is net of 3.0% administrative charge** Based on Audited Financial Statement



Philam Life Growth Invest Fund 3 Fund Inception Date: July 12, 2012

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DISCLOSURE STATEMENT

Readership: This document is intended solely for the addressee(s). Its content may be legally privileged and/or confidential. This materials is only valid if distributed in the Philippines

Opinions: Any opinion expressed in this document may be subject to change without notice. We are not soliciting or recommending any action based on this material

Risk Warning: Past performance is not indicative of future results. Our investment management services relate to a variety of investments, each of which can fluctuate in value. The value of portfolios we manage may fall as well as rise, and the investor may not get back the full amount originally invested. The investment risks vary between di�erent types of instruments. For example, for investments involving exposure to a currency other than that in which the portfolio is denominated, changes in the rate of exchange may cause the value of investments, and consequently the value of the portfolio, to go up or down. In the case of a higher volatility portfolio the loss on realization or cancellation may be very high (including total loss of investment), as the value of such an investment may fall suddenly and substantially.

In making an investment decision, prospective investors must rely on their own examination of the merits and risks involved.

Unless otherwise noted, all information contained herein is sourced from Philam Life internal data.

The content included herein has been shared with various in-house departments within the member companies of Philam Life, in the ordinary course of completion. All Philam Life member companies comply with the confidentiality requirements of their respective jurisdictions. Parts of this presentation may be based on information received from sources we consider reliable

Documents

AIA 2012 Philam Life VUL Report Ph