Philam Asset Management, Inc.

(PAMI) administers, distributes

and provides investment advisory to seven (7) mutual funds.
PAMI gives shareholders superior yields through active
management, diversification and investment expertise only
organizations with extensive financial muscle can provide.

P h i la m B o n d F u n d , In c . ( PB F I)
April 16, 2010

Investment Objective Commentary

Fixing yields on local government bonds were down by
The investment objective of the Philam Bond Fund, Inc. is long-term capital
preservation with returns and inflows derived out of investments in fixed income approximately 6 basis points across the curve over the week of April
instruments. The fund considers medium to long-term investment horizons for its 12-16. The market does not seem to be factoring-in a policy rate
shareholders. hike in the near term due to managed inflation risks as well as a
seemingly comfortable fiscal position at present. The within-forecast
Historical Performance March inflation number, the recent strong performance of the Peso,
benign M3 growth numbers, and even the SDA facility of the central
YTD YOY 3 Yrs. 5 Yrs. Since Inception bank, which has been successfully mopping-up excess liquidity in
the market, have collectively kept inflation expectations anchored
1.67% 5.10% 14.51% 43.68% 189.94% and within the BSP’s forecast range of 3.5-5.5 percent for this year
(notwithstanding the fact that CPI growth has been on a slow but
steady uptrend over the past few months). On the fiscal arena, BIR
NAVPS Graph and BoC’s revenue-collection outperformance since December have
surely allayed some fears of fiscal slippage. Details about the multi-
3.0000
currency RTB, which were released recently, have also reduced
domestic supply uncertainties, especially in light of its potential to
plug-in budget shortfalls. The government intends to issue USD
2.9500
500-million of the multi-currency RTB but has received approval to
issue as much as USD 1.0-billion depending on market appetite.
2.9000
We maintain our view that recent mild rallies in the GS market may
already be in their last phases and that bias for yields to increase
2.8500 has become more imminent. The multi-currency RTB, which is to be
auctioned on April 21, may fuel a mild rally if demand surprises on
the upside. Otherwise, expect rates to have a sideways-up
2.8000 trajectory this coming week. The BSP-MB is scheduled to meet on
April 22 to discuss its next monetary policy move. Although we do
not see the BSP hiking its overnight rates during this meeting, we
2.7500 may see the BSP continue its removal of monetary stimulus
16-Apr-09 16-Jun-09 16-Aug-09 16-Oct-09 16-Dec-09 16-Feb-10 16-Apr-10 measures implemented last year. One of the measures being
considered is a further reduction in the BSP’s rediscounting budget
Source: Investment Company of the Philippines published NAVPS from the current PHP 40-billion to its pre-crisis level of PHP 20-
* Past Performance is not indicative of future results
billion. Market players will likely trade cautiously ahead of this event.

Top Ten Holdings Key Figures

Net Asset Value per Share (NAVPS) PHP 2.9713
RPGB 6.25 % 1/27/14 19.05% Total Fund Size (in Millions) as of 3/31/10 PHP 3,288.49
RPGB 9.125% 09/04/16 15.86% PBF YOY return as of 3/31/10 5.59%
RPGB 7% 01/27/16 14.65% Benchmark YOY return as of 3/31/10 6.88%

PIPN 10.25% 9/10/10 8.30% Inception Date June 18, 1997

RPGB 8.75% 03/03/13 6.98% Fund Currency Philippine Peso
Domicile Philippines
SMPH9.75 8/15/16 6.49% Valuation Method Marked-to-Market
RPGB 0% 04/23/11 4.38% Fund Classification Bond Fund
RPGB 17.50% 01/18/11 3.84% Risk Profile Low
Minimum Holding Period Six Months
TFSPC 7.834% 3/24/11 2.76% Redemption Notice Period Three Days
RPGB 14.125% 06/22/10 2.63% Custodian Bank Citibank N.A.
Transfer Agent Deutsche Bank A.G. (Manila)

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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 different 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.