As of May 24, 2013

No dealer, selling agent and any other person has been

authorized to give information or make representation not
contained in this Prospectus. This Prospectus does not constitute
any offer to any securities other than those to which it relates in
any jurisdiction to any person to whom it is unlawful to make such
an offer or solicitation in such jurisdiction. The delivery of this
Prospectus at any time does not imply that the information herein
contained is correct as of any time subsequent to this date.
The information contained in this Prospectus has been supplied
by PhilEquity Fund, Inc. unless otherwise stated. PhilEquity Fund,
Inc. accepts full responsibility for the accuracy of the information
given herein, and confirms that there are no omissions of fact
which would make any statement in this Prospectus misleading.
PhilEquity Management, Inc., the investment manager of
PhilEquity Fund, Inc. has exerted reasonable efforts to verify the
information herein and does not make any representations or
warranties as to the accuracy or completeness of the materials
contained herein.
PhilEquity Fund, Inc. has filed Registration Statements with the
Securities and Exchange Commission in accordance with the
Philippine Investment Company Act and the Revised Philippine
Securities Act relating to authorized capital stock of the Company.
The Securities and Exchange Commission has issued an Order
dated 27th April 1994 rendering effective the Registration
Statements of the Company covering all of the common units of its
authorized capital stock and a permit to offer the securities for sale
dated 27th April 1994.

TABLE OF CONTENTS
SECTION

PAGE

FUND FEATURES ................................................................................... .1

GLOSSARY .............................................................................................. 2
THE COMPANY ........................................................................................ 3
A. THE FUNDS INCORPORATION ............................................................. 3
B. CAPITALIZATION ................................................................................. 4
C. INCORPORATORS, BOARD OF DIRECTORS, AND OFFICERS ................... 5
D. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS ................. 5
E. EFFECTS OF GOVERNMENT REGULATION ............................................. 5
F. PROPERTIES ....................................................................................... 5
G. LEGAL PROCEEDINGS......................................................................... 6
INVESTMENT GUIDELINES AND STRATEGY ...................................... 6
INVESTMENT LIMITATIONS/RESTRICTIONS ....................................... 7
BENEFITS DERIVED FROM INVESTING IN THE FUND ....................... 8
A. PROFESSIONAL M ANAGEMENT AND SUPERVISION................................ 8
B. DIVERSIFICATION AND M ATCHING THE PHISIX ...................................... 8
C. LIQUIDITY ........................................................................................... 8
D. SATISFACTORY RETURN ...................................................................... 9
RISK FACTORS ....................................................................................... 9
USE OF PROCEEDS .............................................................................. 10
INVESTMENT PROCEDURE11
A. INDIVIDUAL APPLICANTS .................................................................... 11
B. CORPORATE INVESTOR REQUIREMENTS ............................................. 11
C. ACCEPTANCE OF APPLICATIONS ......................................................... 11
D. DELIVERY OF STOCK CERTIFICATES .................................................... 12

REDEMPTION OF SHARES .................................................................. 12

A. NAV PER SHARE COMPUTATION ....................................................... 12
B. MANNER AND METHOD OF REDEMPTION ............................................ 12
C. REDEMPTION PRICE .......................................................................... 13
D. MINIMUM HOLDING PERIOD AND REDEMPTION CHARGES .................... 13
E. SPECIAL CONSIDERATIONS ................................................................ 13
F. APPLICABLE TAXES ........................................................................... 14

COMPUTATION OF NET ASSET VALUE ............................................. 14

PARTIES INVOLVED IN THE FUND ..................................................... 16
A. INVESTMENT M ANAGER AND PRINCIPAL DISTRIBUTOR.......................... 16
B. CUSTODIAN BANK ............................................................................ 16
C. TRANSFER AGENT ............................................................................ 17
D. LEGAL COUNSEL..17
E. EXTERNAL AUDITOR ......................................................................... 17
F. SIGNIFICANT EMPLOYEE .................................................................... 17
G. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ................... 17
EXPENSES CHARGEABLE TO THE FUND ......................................... 18
MANAGEMENT FEE .............................................................................. 18
EXPENSES CHARGEABLE TO THE INVESTMENT MANAGER ........ 18

The Securities and Exchange Commissions approval of this

Prospectus, the order registering the authorized common capital
stock of the Company, and the issuance of the certificate or permit
to sell are permissive only and do not constitute a
recommendation or endorsement by the Securities and Exchange
Commission of the securities permitted to be sold.
The common shares of the Company are not listed or traded on
the Philippine Stock Exchange.
The reader should consult his stockbroker, legal counsel,
professional accountant, or other professional adviser with respect
to the acquisition, holding or disposal of the securities described in
this prospectus.

FUND FEATURES
Type of Investment
Open-end mutual fund
Shares Offered
Common stock
Offering price
At Net Asset Value (NAV) per share for the banking day, if
payment is made within the daily cut-off time, plus a sales
load/fee. The NAV per share on the following banking day will be
used for payment made after the daily cut-off time. The daily cutoff time shall be 12 oclock noon of a banking day. NAV per share
is defined as the difference of the total assets of the company less
its total liabilities divided by the number of shares outstanding.
NAV per share is computed daily on each banking day and posted
in the office of the Company. A banking day is a day when
commercial banks in Metro Manila are required or authorized by
law to open.
Minimum Purchase
The minimum initial purchase is P5,000 and a minimum of P1,000
worth of shares for additional purchases,
Sales Load/Fee
Investment Amount
5,000 - 99,999
100,000 - 249,999
250,000 - 499,999
500,000 - 999,999
1,000,000 - 1,999,999
2,000,000 - 4,999,999
5,000,000 - 9,999,999
10,000,000 - 19,999,999
20,000,000 49,999,999
50,000,000 & above
1

Sales Load
3.50%
3.25%
3.00%
2.75%
2.50%
2.00%
1.50%
1.00%
0.50%
0.25%
PhilEquity Fund, Inc.

Redemption Price
The redemption price of shares surrendered for redemption before
the daily cut-off time 12:00 oclock noon shall be the next
computed net asset value, i.e. the NAVPS computed at the end of
the same business day. Requests for redemptions received by the
fund after the said cut-off time shall be considered received the
following business day and processed accordingly.
Redemption charge
Term
Less than 1 year
1 year - less than 2 years
2 years and above

Fee
2.00%
1.50%
0.00%

GLOSSARY
Investment Manager
Philequity Management, Inc.
Principal Distributor
Philequity Management, Inc.
The "Fund" or the "Company"
PhilEquity Fund, Inc.
BSP
Bangko Sentral ng Pilipinas
Custodian Bank
Philippine Depository and Trust Corp.
Investor
Any person, association or corporation who desires to invest in the
shares of the Fund
NAV
Net Asset Value
Prospectus

NIRC or R.A. 8424

National Internal Revenue Code of 1997
Pesos or P
Philippine Peso, lawful currency of the Philippines
PSE or the "Exchange"
Philippine Stock Exchange, Inc.
R.A. 2629
Republic Act No. 2629 or the Investment Company Act
SEC or the "Commission"
Securities and Exchange Commission
"Shareholder" or "Stockholder
Any natural or juridical person who has subscribed to the shares
of the Fund.
Transfer Agent
Banco de Oro Universal Bank

THE COMPANY
A. The Funds Incorporation
The PhilEquity Fund, Inc. which was incorporated in the
Philippines on February 21, 1994 under the Republic Act No. 2629
or the Investment Company Act as a diversified, open-end
investment company. The Fund is engaged in the sale of its
shares of stock and in the investment of the proceeds from the
sale of its shares into a well-selected portfolio of securities, both
debt and equity. The fund is designed to accommodate both big
and small investors seeking capital appreciation to avail of the
professional management of their investments at the lowest
possible cost, liquidity, growth opportunity, and satisfactory returns
on their investments. Upon notice, the Fund is ready to redeem
the shareholdings of any investor at the applicable Net Asset
Value per share.

PhilEquity Fund, Inc.

B. Capitalization and Ownership

The Fund has an authorized capital of One Billion Pesos
(P1,000,000,000.00) divided into 1.0 billion shares with a par
value of P1.00 per share.
The incorporators of the Fund agreed not to sell, transfer, convey,
encumber or otherwise dispose of their shares of PhilEquity Fund,
Inc. within twenty-four (24) months from the issuance by the
Securities and Exchange Commission of an order authorizing the
sale of PhilEquity Fund shares to the public.
Each share of stock of the Company is a voting stock with voting
rights equal to every other outstanding shares of stock, and
subject to right of redemption.
1. Right of Redemption
The holder of any share of stock of the Company, upon its
presentation to the Company, or its duly authorized
representatives, is entitled to receive by way of redemption
approximately his proportionate share of the Companys assets or
cash equivalent thereof, i.e. the current Net Asset Value, subject
to the existing laws and the by-laws of the Corporation; provided,
however that no such redemption may be made unless the
remaining unimpaired capital of the Corporation shall be 50% of
its outstanding liabilities to its creditors of the Company. Provided,
further, the redemption may be suspended during any period
specified under the by-laws and under any applicable laws and
regulations.
2. Waiver of Preemptive Rights
No Stockholder shall, because of his ownership of stock, have a
pre-emptive right or other right to purchase, subscribe for, or take
any part of any stock or any other securities convertible into or
carrying options or warrants to purchase stock of the Company.
The Companys Article of Incorporation further provided that any
part of such stock or other securities may at any time be issued,
optioned for sale and sold or disposed of by the Company
pursuant to resolution of its Board of Directors, to such persons
and upon persons and upon such terms as such Board may deem
Prospectus

proper, without first offering such stock or securities on any part

thereof to existing stockholders.
3. Restriction on Transfer
No transfer of stock of the Company which would reduce the stock
ownership or equity interest of Filipino citizens to less than the
percentage required by applicable laws and regulations shall be
caused or allowed to be recorded in the proper books of the
Company.
C. PhilEquity Fund Inc. Directors and Officers
Chairman / President
Treasurer
Director
Director
Director
Director
Director

Ignacio B. Gimenez
Violeta O. Luym
Fidel P. Purisima
Gregorio T. Yu
Felipe U. Yap
Valentino C. Sy
Frederick Tiu

D. Compensation of Directors and Executive Officers

The directors and executive officers of the Fund have not received
any form of compensation from inception up to present. Their
contributed efforts to the Fund are on voluntary basis only. Also,
there is no per diem, bonus, profit sharing or other compensation
plan, pension or retirement plan, contract or arrangement in which
any director or executive officer of the Fund will participate.
E. Effects of Government Regulation
With the lowering of the threshold amount of covered transactions
under the Anti-Money Laundering Act of 2001 (Republic Act No.
9160) from P4,000,000.00 to P500,000.00, the investing public
would be wary of attempting to invest an amount that would place
their investment in such a position that would entail a report to the
AMLA Council. Moreover, investors appear to consider the
reportorial provision of the Anti-Money Laundering Act as an
invasion of their secrecy of deposit, more so if the source of such
investment is legitimate. Hence, with the AMLA as a discouraging
5

PhilEquity Fund, Inc.

factor, the Fund expects limited

shareholders in the near future.

capital

investment

by

F. Properties
Operations are conducted within the premises of the fund
manager. All facilities are either owned or provided by the fund
manager. Being a fund, the Fund has neither properties under its
fixed assets accounts nor hire employees for its operation.
G. Legal Proceedings
The Fund has not been involved in any litigation or disputes. The
Fund does not foresee any legal dispute to be instituted either by
any government agency or entity or by third persons.

INVESTMENT GUIDELINES AND STRATEGY

Investment Policy
PhilEquity Fund, Inc. (Fund) is an open-end mutual fund. The
Funds investment objective is to seek long-term capital
appreciation through investment primarily in equity securities of
listed Philippine companies while taking into consideration the
liquidity and safety of its investments to protect the interest of its
investors.
The Fund intends to invest its assets in a variety of Philippine
industries to achieve diversification, but will act as such within the
provision of applicable laws and regulations.
A. Fixed Income Portfolio
A portion of the Funds investment portfolio shall be invested in
short to medium term corporate debt papers registered with the
Securities and Exchange Commission and had been approved by
the Board of Directors of the fund management company.
The fund shall allocate at least 10% of its assets in short-term
government securities, bonds or other evidences of indebtedness
issued by the Philippine government or any of its instrumentalities,
Prospectus

savings or time deposits with commercial banks and approved by

the Board of Directors of the fund management company.
B. Equity Portfolio
The Fund shall invest its assets in a variety of selected and listed
Philippine industries. These companies must have shown a record
of profit growth, dividend payment and stability. In selecting
industries and companies for investment, the Investment Manager
will consider factors such as overall growth prospects, competitive
position in markets served, technology, research and
development, productivity, labor costs, raw materials sources and
costs, capital resources, profit margins, return on investments,
government
regulations,
and
experience,
quality and
competitiveness of management. While it is expected that the
Fund will invest principally in securities of established companies,
investments may also be made in securities of newly listed
companies. Studies on these companies shall be considered from
time to time. The Fund intends to purchase and hold securities for
long-term gain, except on a case-to-case basis.

INVESTMENT LIMITATIONS/RESTRICTIONS
The following are the limitations and fundamental policies of the
Company and the provisions of the Securities and Exchange
Commission:
1. The Fund shall not participate in any underwriting or selling
group in connection with public distribution of securities,
except for its own capital stock.
2. The maximum investment in any single enterprise shall not
exceed an amount equivalent to ten percent (10%) of the
Funds Net Asset Value, and in no case shall the total
investment of the Fund exceed ten (10%) of the outstanding
securities of any one investee company.
3. The Fund shall not incur any further debt or borrowings unless
at the time of its occurrence or immediately thereafter there is
an asset coverage of at least three hundred percent (300%)
for all its borrowings. In the event that such asset coverage
shall fall below 300%, the Fund shall within three (3) days
thereafter reduce the amount of its borrowings to an extent
that the asset coverage of such borrowings shall be at least
300%.
7

PhilEquity Fund, Inc.

4. Operational expenses shall not exceed ten percent (10%) of

its total investment fund or total net worth as shown in the
previous years audited financial statements.
5. The Fund shall not make any investment for the purpose of
exercising control of management.
6. The Securities and Exchange Commission, by order, unless it
provides otherwise, the Fund may not engage in any of the
following:
- margin purchase of securities;
- commodity futures contracts;
- precious metals;
- unlimited liability investments;
- short selling of currencies;
- short selling of investments;
- other investments as the SEC shall, from time to time,
prescribe.

BENEFITS DERIVED FROM INVESTING

IN THE FUND
A. Professional Management
An investor receives professional management at rock-bottom
fees. No matter how small or big your investments are,
professional care is given to your Fund. The managers keep track
of your investments in order to achieve the highest possible
returns consistent with sound investment management and
judgment.
B. Liquidity
The investor can purchase and redeem shares easily. The
company redeems the shares from the investor at the applicable
Net Asset Value per share, subject to the rules and regulations set
by the Securities and Exchange Commission.
C. Diversification
Owning a large portfolio of stocks is a standard reason given for
buying funds. There are two basic risks in owning stocks. The risk
that the market may go down, and the risk that an individual
company may do poorly. Diversification is more complicated than
it might appear. It is not enough to own a dozen or more stocks.
Prospectus

Proper diversification demands investments in stocks of different

industries that are likely to behave the same way at the same time
resulting in a long-term appreciation of the Fund.
D. Satisfactory Return
Performance becomes an important element in the mutual fund
operation. Although there is no guarantee of yield on an
investment in the mutual fund, the Fund offers better opportunity
for income growth compared to other fixed-income investments
because of its investments in equities.

RISK FACTORS
As with any investment, the Funds past performance is no
guarantee of its future success. Over the long-term, however, the
success or failure to profit in the fund will depend on the risks and
volatility inherent in the combination of shares in the funds
portfolio.
THE FUND DOES NOT CARRY A GUARANTEED RATE OF
RETURN. INVESTMENT RETURN AND PRINCIPAL VALUE OF
AN INVESTMENT WILL FLUCTUATE SO THAT AN
INVESTORS SHARES WHEN REDEEMED MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
Various risk factors can affect the market value of the assets of
the Fund and can cause fluctuations in the Fund's net asset value.
The Fund, however, adopts steps to minimize, if not eliminate, the
effect of these risks. The major risks facing the Fund include the
following:
1. Market Risk is the risk that the value of your mutual fund
investment will be adversely affected by the fluctuations in the
price level or volatility of one or more of the underlying instruments
of the mutual fund. This consists of two main components:
a. Systematic Risk is the variability in price caused by
factors that affect all securities across all markets (e.g.
significant economic or political events). As an illustration,
when the country's general political and economic
situations are perceived to be in turmoil, the stock market,
9

PhilEquity Fund, Inc.

in general, experiences lack of trading interest that will

consequently result in thin volume trading and wide price
volatility. Such situations generally will trigger a downward
momentum for both the stock prices and trading volumes
until the political and economic condition normalize. As a
consequence, these instances can result in the redemption
prices of redeemed shares being less than the prices at
which the shares were originally purchased. Investors who
redeem their shares during this time may not recover the
full cost of their investment.
b. Unsystematic Risk is the variability in price caused
by factors which are specific to the particular issuer
(corporation) of the shares of stocks. Through proper
portfolio diversification, this risk can be minimized as
losses on one particular stock may be off-set by gains in
another.
2. Liquidity Risk is the risk that an investment may not find a
ready buyer. This is minimized by the fact that the Fund only
invests in listed, marketable equities.

USE OF PROCEEDS
The proceeds from the sale of the securities shall be held by the
custodian bank. It shall be invested and reinvested by the Fund in
stocks comprising the Phisix. The Fund shall be guided by the
investment policies and restrictions on its investments under the
topics Investment Objective and Investment Policies and
Investment Restrictions. Inasmuch as immediately investing the
entire Fund, or large amounts of investments, at any one time in
the Index stocks may result in an artificial increase in stock prices,
a portion of the Fund shall also be invested in short-term debt
securities and fixed-income securities until such time that the
entire Fund can be properly allocated among all the Index stocks.
As of the filing of this Amended Prospectus, total proceeds from
the issuance of the shares of stock of the Fund is P25,000,000.00
which were invested in various securities listed with the Philippine
Stock Exchange.
Prospectus

10

INVESTMENT PROCEDURE
A. Individual Applicants
Any qualified individual may purchase PEFI shares, through its
principal distributor, or any authorized investment salesman.
An application form in triplicate must be accomplished by the
investor and must be submitted together with the payment order
payable to PhilEquity Fund, Inc. An official receipt will be issued to
the investor if the investment was made in cash or a copy of the
Investment Application Form will be provided if payment was
made in check. The investor shall also be furnished a confirmation
together with a copy of his approved Account Opening Form.
The minimum initial purchase is P5,000.00 with additional
investment at a minimum of P1,000.00.
B. Corporate Investor Requirements
The following documents must be submitted together with the
application form by the corporate investors:
1. Certified copy of the corporations SEC Certificate of
Registration, Articles of Incorporation and By-Laws;
2. Board resolution duly certified by the corporations
Secretary, authorizing the subscription to the share applied
for and specifying the authorized signatories;
3. Certification of the corporations Secretary indicating the
percentage of holdings by nationality of the corporations
stockholders.
C. Acceptance of Application
Application to purchase are subject to confirmation of PEMI as to
amount of shares and the applicable NAV with the final approval
by the investment manager and distributor of PEFI. Applications
should comply with the requirements set in this Prospectus and
such other rules, regulations and applicable laws.
The Fund Manager of PEFI reserves the right to accept or reduce
the number of shares indicated in the Application Form at its sole
discretion and in such manner that it may deem appropriate. In the
11

PhilEquity Fund, Inc.

event the Investment Application Form is not accepted as a whole

or in part, the Fund manager will refund the corresponding
investments to the applicant, without interest within seven (7)
banking days from submission of the Application.
D. Delivery of Stock Certificates
Stock certificates are issued to investors in scripless form. Stock
certificates and Custodian Receipts evidencing ownership of
shares shall be issued by the transfer agent, Banco De Oro
Universal Bank, only upon the request of the investor. The cost on
the issuance of stock certificates shall be borne by the Investor.
The stock certificate shall be delivered as soon as practicable
after the application has been approved by PEMI, at the address
of the investor indicated in the Application Form to Purchase PEFI
shares, the investor will also receive a periodic Fund Statement
indicating the status of their investment in the Fund.

REDEMPTION OF SHARES
A. NAV Per Share Computation
The NAV per share shall be the computed difference between the
total assets of the Fund and its total liabilities divided by the
number of shares outstanding. The NAV shall be posted in the
conspicuous place of the principal office of the Fund as well as in
all its branches and designated redemption centers. It shall also
be published in at least two (2) newspapers of general circulation
in the Philippines on a daily basis.
B. Manner and Method of Redemption
Upon the presentation to PEMI of the securities for redemption,
the holder of the shares of the Fund is entitled to receive by way
of redemption approximately his proportionate share of the Fund's
current net assets or the cash equivalent thereof, i.e. the net
current asset value per share, subject to existing laws and the ByLaws of the Fund. Any request for redemption should always be
accompanied by duly endorsed stock certificates and custodian
receipt/s, if they have been issued. The redemption proceeds shall
Prospectus

12

be paid within seven (7) banking days from receipt of the duly
accomplished redemption application.
C. Redemption Price
The redemption price of the securities surrendered within the daily
cut-off time shall be the next computed NAV per share after the
request for redemption is received. Securities surrendered after
the daily cut-off time shall be deemed to have been received on
the next banking day. The daily cut-off time shall be 12:00 o'clock
noon.
D. Minimum Holding Period and Redemption Charges
A redemption fee of two percent (2.0%) of the redemption
proceeds shall be deducted therefrom, if redemption is made on
the first year, one and a half percent (1.5%) if redeemed on the
second year, and no redemption fee shall be deducted if
redeemed beyond the second year from the time of purchase.
E. Special Considerations
No redemption will be allowed should any of the following
circumstances exist:
1. The Philippine Stock Exchange is closed for reasons other than
the customary weekend or holiday closings;
2. Trading at the Philippine Stock Exchange is suspended or
restricted;
3. There exists an emergency as a result of which disposal by the
Fund of securities owned by it is not reasonably practicable, or the
computation or determination of the net asset value is not
practicable;
4. The Securities and Exchange Commission, by order, permits
suspension of the right of redemption for the protection of the
Fund's stockholders; or

13

PhilEquity Fund, Inc.

5. Such other circumstance as the applicable Philippine laws or

regulations may allow.
F. Applicable Taxes
Under the National Internal Revenue Code of 1997 ("NIRC"),
gains realized by the investor upon redemption of shares of stock
in a mutual fund company are excluded from the computation of a
taxpayer's gross income and are thus exempt from taxation.
However, a final tax on the amount of cash and/or property
dividends received by an individual from a mutual fund company
are taxable, beginning January 1, 2000, at the rate of 10% for
Filipino citizens and resident aliens, and 20% for non-resident
aliens. On the other hand, cash and/or property dividends
received by corporations are not subject to tax, with the exception
of dividends received by non-resident foreign corporations which,
in general, shall be taxed at the rate of 15% of the amount of
dividends received.

COMPUTATION OF NET ASSET VALUE

The net asset value of each share of the capital stock of the Fund,
as of the close of business of any day, shall be the quotient
obtained by dividing the value, as of such closing date, of the
assets of the Fund less the liabilities (exclusive of capital stock
and surplus) by the total number of shares of capital stock
outstanding at such close, all determined and computed as
follows:
(a) The assets of the Fund shall be deemed to include (i) all cash
on hand, deposit in a bank, (ii) all bills and notes and accounts
receivable, (iii) all shares of stock and subscription rights and
other securities owned or contracted for by the Fund, other than
its own capital stock, (iv) all stock and cash dividends and cash
distributions to be received by the Fund and not yet received by it
but declared to stockholders of record on a date on or before the
date as of which the net asset value is being determined, (v) all
interests accrued on any interest bearing securities owned by the
Fund, (vi) all other property of every kind and nature including
prepaid expenses.
Prospectus

14

In determining the value of the assets of the Fund for the purpose
of obtaining the net asset value for acquisition, purchase,
repurchase or redemption by the Fund of shares of its capital
stock from its stockholders, each security listed in the Philippine
Stock Exchange shall be valued on the basis of the average
closing price thereon on the business day on which such net asset
value for sale and redemption purposes is to be calculated. If
there be no transaction on particular issue listed, then the value to
be used is that of the previous day or the last day that a
transaction was closed. As used herein "business day" shall mean
a day on which the Philippine Stock Exchange is open for trading
in securities and each business day will be at the hour and minute
when such Exchange closes for the trading of securities for the
day.
All other assets of the Fund, including real estate, prepaid and
accrued expenses and dividends receivable shall be valued by
such standard and acceptable accounting methods as the Board
of Directors and its auditor shall deem to reflect their fair market
value.
(b) The liabilities of the Fund shall be deemed to include (i) all bills
and notes and accounts payable, (ii) all administrative expenses
payable and/or accrued (including management fees), (iii) all
contractual obligations for the payment of money or property,
including the amount of any unpaid dividend declared upon the
Fund's stock and payable to stockholders of record on or before
the day as of which the value of the Fund's stock is being
determined, (iv) all reserves authorized or approved by the Board
of Directors for taxes or contingencies, and (v) all other liabilities
of the Fund of whatsoever kind and nature except liabilities
represented by the outstanding capital stock and surplus of the
Fund.
The NAV per share shall consistently be computed in accordance
with the foregoing formula. Any change of the computation or
valuation shall be subject to the approval of the Commission.

15

PhilEquity Fund, Inc.

PARTIES INVOLVED IN THE OPERATION OF

THE FUND
The different entities that are directly involved in the operations of
PhilEquity Fund, Inc. (PEFI) are: PhilEquity Management, Inc.
(PEMI) the investment manager; Banco de Oro Universal Bank
the transfer agent; and Philippine Depository and Trust Corp. the
custodian bank of PEFI.
A. Investment Manager and Principal Distributor
PhilEquity Management, Inc. is the investment manager of the
Fund. PEMI provides and renders professional management and
technical services to corporations. PEMI also acts as the principal
distributor of the Fund. It takes charge of the sales of PEFI shares.
The guidelines for the management and operations of PEFI are
set in the Fund Management and Distribution Agreement between
PEFI and PEMI. PEMI is a corporation organized by a group of
individuals who have a track record in the stock brokerage
business, having successfully managed their clients resources.
PhilEquity Management Inc. Directors and Officers
Chairman of the Board
President
Director
Director
Director
Director
Director
Director
Treasurer

Roberto Z. Lorayes
Edmundo Marco P. Bunyi, Jr.
Leo McGuire Garcia
Wilson L. Sy
Washington Z. Sycip
Aurora L. Shih
Ramon Y. Sy
Antonio R. Samson
Joseph L. Ong

B. Custodian Bank
The Custodial Agreement covers the custodian banks duties on
receipt of investible funds, the redemption procedure, reports and
records required by the Fund and the fund manager, custody of
certificates representing investments made by the fund manager
Prospectus

16

for the Fund and fees of the custodian bank. The custodian bank
of PEFI is Philippine Depository and Trust Corp.
C. Transfer Agent
The transfer agent of PEFI is Banco De Oro Universal Bank.
D. Legal Counsel
The law offices of Tan Venturanza and Valdez serve as the legal
counsel for PEFI.
E. External Auditor
The accounting firm of Sycip Gorres Velayo and Company acts as
the external auditor of PEFI.
F. Significant Employee
The Fund has no employee, significant or otherwise, as the
operation of the Fund is being made through and within the
premises of its fund manager.
G. Certain Relationships and Related Transactions
During the last two (2) years the Fund has not been a party to any
transaction or proposed transaction, in which any director or
executive officer of the Fund or any security holder owning 5% or
more of the securities of the Fund or any member of the
immediate family of such persons, had a direct or indirect material
interest except the Management and Distribution Agreement
entered into by the Fund and its fund manager last 14 March
2003, which was amended last 11 August 2004.

EXPENSES CHARGEABLE TO THE FUND

The following expenses shall be for the account of the Fund and
shall be given priority in determining compliance by the Fund with
any limitation on operational expenses set forth in applicable
Philippine laws, rules and regulations.
1. Compensation of the officers and directors of the Fund;
2. Audit and legal fees;
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PhilEquity Fund, Inc.

3. Brokerage charges and other customary fees and charges in

connection with the acquisition, appraisal and disposition of the
Fund's assets;
4. Fees of the custodian bank and auxiliary custodian banks, to
the extent not absorbed by buyers of the Fund's securities;
5. Cost of printing and mailing reports, notices, proxy forms, and
other communications to stockholders of the Fund, except those
borne by the custodian bank;
6. Fees of transfer agents for the securities of the Fund and other
transfer fees to the extent not absorbed by buyers of the Fund's
securities;
7. Costs of the registration of the Fund and its securities with the
SEC; and 8. Taxes, including income taxes, license fees,
documentary stamp taxes, to the extent not absorbed by buyers of
the Fund's securities, including cost of bonding the Fund's
personnel and officers as may be required by law or by rules and
regulations of the SEC.

MANAGEMENT FEE
A management fee equivalent to one and a half percent (1.5%)
per annum of the average net asset value of the Fund's assets
computed on a daily basis, shall be payable by the Fund to its
investment manager, Philequity Management, Inc.

EXPENSES CHARGEABLE TO THE

INVESTMENT MANAGER
The following expenses shall be deemed covered by the
management fee of one and a half percent (1.5%) per annum of
the average net asset value of the Company's assets paid under
Section 3 of the Management and Distribution Agreement and
shall therefore be for the account of PEMI, to wit:
Prospectus

18

1. Salaries, bonuses, allowances and other compensation of the

personnel hired by PEMI to perform the services in Section 1(a) of
this Agreement, including other costs incurred by PEMI's
salesmen, personnel and officers, in connection with the selling of
the Fund's shares as may be required by applicable Philippine law
or by rules and regulations of the SEC;
2. Expenses of providing the office space and other administrative
facilities referred to in Section 1(b) of this Agreement, including
office rentals, cost of office equipment and supplies, cost of
utilities, such as telephone, light and water facilities; and
3. All other operating expenses of the Fund, subject to the
exceptions specified above under the topic Expenses Chargeable
to the Fund.

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PhilEquity Fund, Inc.