Philam Life Unit-linked Funds Performance Report Full Year 2017 · 2020-02-02 · products and...

Philam Life Unit-linked FundsPerformance Report Full Year 2017 HELPING PEOPLE LIVE

LONGER, HEALTHIER AND BETTER LIVES

philamlife.com (02) 528-2000 PhilamLifeAIA

About Philam Life

The Philippine American Life and General Insurance Company (Philam Life) is the country’s premier life insurance company. Established on 21 June 1947, Philam Life has earned the trust of customers for its financial strength, strong brand name, and ability to deliver on its promises.

Philam Life has PHP251.4 billion in total assets as of 31 December 2017, while serving almost 600,000 individual policyholders and over 2,200,000 insured group members.

Philam Life understands the needs of its customers and provides holistic solutions that include life protection, health insurance, savings, education, retirement, investment, group, and credit life insurance. It also offers bancassurance and fund management products and services through its subsidiaries—BPI-Philam Life Assurance Company (BPLAC) and Philam Asset Management Inc. (PAMI).

Philam Life is a member of AIA Group Limited, the largest independent publicly listed pan-Asian life insurance group.

About the Philam Group

The Philam Group comprises the biggest life insurance company in the Philippines. By putting its customers at the center of its operations, the Philam Group has earned the trust of its stakeholders and has achieved continued growth over the years.

The Philam Group was formed with the mission of empowering Filipinos to achieve financial security and prosperity. Through its strong network, it is able to offer financial solutions such as life protection, health insurance, savings, education, retirement, investment, group and credit life insurance, and fund management products and services.

After the establishment of Philam Life in 1947, the Philam Group has since expanded to include other affiliate companies, namely: BPI-Philam Life Assurance Company (BPLAC), Philam Asset Management Inc. (PAMI), Philam Call Center, and Philam Foundation.

Based on the Insurance Commission results as of 31 December 2017, the combined total premium income of Philam Life and BPLAC is at PHP40.2 billion, making it the market leader in the Philippines based on total premium income. Its strength and stability is further solidified with its top rank in terms of assets at PHP251.4 billion and net worth at PHP69.5 billion. It is a member of AIA Group Limited, the largest independent publicly listed pan-Asian life insurance group.

About AIA

AIA Group Limited and its subsidiaries (collectively “AIA” or the “Group”) comprise the largest independent publicly listed pan-Asian life insurance group. It has a presence in 18 markets in Asia-Pacific – wholly-owned branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, Cambodia, a 97 per cent subsidiary in Sri Lanka, a 49 per cent joint venture in India and a representative office in Myanmar.

The business that is now AIA was first established in Shanghai almost a century ago. It is a market leader in the Asia-Pacific region (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$216 billion as of 30 November 2017.

AIA meets the long-term savings and protection needs of individuals by offering a range of products and services including life insurance, accident and health insurance and savings plans. The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and employees across Asia-Pacific, AIA serves the holders of more than 30 million individual policies and over 16 million participating members of group insurance schemes.

AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code “1299” with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol: “AAGIY”).

HELPING PEOPLE LIVE LONGER, HEALTHIER AND BETTER LIVES

December 2018

Dear Policyholder, The global economic growth story continued in the year 2017 as the world registered its strongest growth since 2011. Asia contributed to more than half of the world Gross Domestic Product (GDP) growth while in the region, the Philippines remains to be one of the fastest growing nations as it delivered another stellar economic performance in 2017. Robust domestic demand and investment spending remain supportive of Philippine growth. And this was exhibited by the performance of the Philippine Stock Index (PSEi), which gained 25.1% in 2017. The Build, Build, Build Infrastruc-ture program by the government is expected to continue to buoy economic growth, aided by a strong consumer and jobs market, and the imposition of the Tax Reform Acceleration and Inclusion (TRAIN) Act. Economic growth is normally accompa-nied by price increases. In 2017, the inflation accelerated 3.2% though it remains to be within the Bangko Sentral ng Pilipinas’ (BSP) target. Given higher inflation risks, local interest rates trended higher at the year’s close.

While the following pages will give you a more in-depth look at the developments that affected both the local and global markets, below is a summary of the funds’ performance:

Bond Funds 2017 Return CurrencyPhilam Life Fixed Income Fund -0.56% PesoPAMI Philam Bond Fund 0.10% PesoPhilam Life Dollar Bond Fund 3.07% DollarPhilam Life Global Bond Fund 2.05% Dollar

Balanced Funds 2017 Return CurrencyPhilam Life Balanced Fund 12.41% PesoPAMI Philam Fund 11.47% Peso

Equity Funds 2017 Return CurrencyPhilam Life Equity Fund 21.38% PesoPAMI Philam Strategic Growth Fund 20.03% PesoPAMI Philam Equity Index Fund 24.32% Peso

Despite the volatility in the market and other factors, Philam Life reaffirms its strength and leadership with strong financial performance in 2017 based on audited financial statements: - Total Assets of PHP259.8 billion- Net Worth of PHP78.6 billion- Paid up Capital of PHP2.0 billion- Gross Premiums of PHP20.2 billion- Net Income of PHP6.0 billion

We are thankful for your loyalty and continued patronage. We shall continue to fulfil our commitments to you, our policyholders. Should you have any inquiries, 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 www.philamlife.com or go to the nearest Philam Life Customer Service Center for assistance.

ARIEL G. CANTOSChief Executive Officer


The emergence of populist sentiment and prospects of higher inflation were key themes at the start of 2017 that were expected to underpin global market develop-ments for the year. The global economy continued to accelerate, achieving annual growth of 3.7%. The US Federal Reserve continued to hike interest rates by a total of 0.75% during the year. Interest rates largely kept to a range but geopolitical concerns in the Middle East and in North Korea caused periods of market volatility. Locally, implementation of the Duterte administration’s economic agenda bolstered domestic expansion. Infrastructure spending and foreign direct investments were buoyed by optimism in an economy that continues to be in a favorable demographic position.

The Philippines once again reported strong economic performance in 2017, with GDP growth at 6.6%. Driving the expansion were robust domestic demand and an increase in investment activity. Private consumption grew 6.1%, fuelled by strong overseas Filipino worker remittances (+5.3%), while the unemployment rate declined to 5.7%. Government spending (+14.3%) and private investment (+8.2%) also contributed to economic growth. On the other hand, a deterioration in the trade balance had a negative impact on growth. Weak exports combined with a surge in imports led to a US$29.8 billion trade deficit for the year. In terms of sector, industry (+7.3%) and services (+6.8%) were strong, while agriculture grew at a modest 2.4%. Foreign Direct Investments (FDI) increased by 21.4% to US$10.05 billion. Gross International Reserves (GIR) ended the year at US$81.6 billion, representing an 8-month import cover. Inflation accelerated to 3.2% in 2017, up from 1.8% during the previous year and still within the 2-4% target range set by the BSP. This overall positive economic backdrop allowed the Philippine Stock Exchange Index (PSEi) to register robust gains, advancing 25.1% to close the year at 8,558. A key development towards year-end was the passage of the TRAIN Act. Key provisions of the law were crafted towards supporting infrastructure development, ensuring financial inclusion and alleviating poverty. The Consumer Price Index target range remains at 2-4% for 2018. Meanwhile, execution of the government’s ‘Build, Build, Build’ program is expected to sustain the increase in investments entering the country. Fitch Ratings upgraded the Philippines’ rating to BBB with a stable outlook, highlighting robust domestic demand and rising foreign direct investments as key factors. This action aligns the country’s credit rating with S&P and Moody’s. The Philippine economy is expected to remain strong going into 2018, with GDP growth forecasted at 6-7% for the year.

General Market Overview

The Local Economy

2017 ANNUAL REPORT PHILAM LIFE VARIABLE FUNDSHELPING PEOPLE LIVE

LONGER, HEALTHIER AND BETTER LIVES

The Philippine bond market began the year on cautious footing amid concerns on potential changes in US trade policy and its possible negative impact on the local economy, as well as political issues surrounding the new administration. Market interest rates fell from mid-January to February, driven by an improvement in risk sentiment. However, interest rates retraced upwards in March as the US Federal Reserve began a series of policy rate hikes. Inflationary concerns and bond supply kept local interest rates range bound during the second quarter, with the Marawi situation and the subsequent declaration of Martial Law in Mindanao creating a somewhat negative market sentiment. Local interest rates proceeded to climb steadily during the second half of the year on the back of a large issuance of Philippine government bonds, as well as rising US interest rates brought about by improving economic conditions. The Bureau of Treasury (BTr) issued US$2 billion in 25-year US$ Republic of the Philippines (ROP) bonds with a coupon rate of 3.70% in February. In addition to the regular Fixed Rate Treasury Note (FXTN) auctions, the BTr also sold PHP430 billion in Retail Treasury Bonds (RTBs) from two auctions conducted during the year. The first was a 3-year, PHP175 billion issuance in March that fetched a coupon rate of 4.25%, while the second was a 5-year, PHP255 billion issuance in November, sold at a coupon rate of 4.625%. Interest rates are expected to continue trending higher in 2018. Locally, higher inflation expectations due to the implementation of the TRAIN Act may prompt the BSP to adjust policy interest rates higher.

Equities markets in Asia generally performed well in 2017 and the Philippines was no exception. The PSEi posted a 25.1% gain, mirroring the performance of the Dow Jones Industrial Average. The local index closed the year at 8,558, up from the previous year’s close of 6,841. Conditions were ripe for a rally in equities markets globally against the backdrop of a synchronized recovery involving the US, Europe, and Asia. US GDP grew 2.3% in 2017, up from 1.5% during the previous year under a backdrop of low inflation and low unemployment. As a result, the Philippine equities market underwent a re-rating. The 12-months forward price-earnings ratio of the PSEi rose to ~19x as at end-December 2017 from 16.3x in December 2016. The total value of announced equity offerings (which includes Initial Public Offerings (IPO), Additional Offerings and Stock Rights Offerings (SRO)) declined to US$1.97 billion in 2017 from US$3.22 billion during the previous year. This is partly due to a high base as there were two particularly large IPOs (Cemex Holdings Philippines and Pilipinas Shell) and one large SRO (BDO) announced in 2016.

Local Fixed Income Market

Equities Market


Global Fixed Income Market

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, 2017, total assets under management reached over PHP55.4 billion, excluding those of other Philam affiliates. Philam Life combines its expertise with the strength of its senior management to manage portfolios effectively to achieve favorable returns.

FUND MANAGERS

World GDP growth was the strongest reported since 2011. The International Monetary Fund (IMF) acknowledged that while advanced economies performed better than expected, Asia remains the fastest growing region, accounting for more than half of world GDP. The US continued to expand at a moderate pace, resulting in a stronger labor market and higher inflation. The 10-year US Treasury yield traded in a relatively tight range during the year, touching a high of 2.63% in March and a low of 2.04% in September, and closing the year at 2.40%. Yields on shorter-tenor US Treasury bonds adjusted higher compared to their longer-tenor counterparts – an effect of the interest rate hikes implemented by the Federal Reserve throughout the year. In the Eurozone, the 10-year Germany government bond yield traded at a low of 0.15% in April and reached a high of 0.60% in July, before ending the year at 0.43%. Meanwhile, US$ Republic of the Philippines (ROP) bonds continued to track the movement of US Treasuries, with the 10-year ROP bond yield reaching a high of 3.35% in March, a low 2.70% in September, then settling at 2.98% by yearend. Monetary policy remains broadly accommodative globally. An improvement in the European economy prompted the European Central Bank (ECB) to signal a reduction in its stimulus program. The Japanese economy was stronger than expected, and with inflation remaining below target, the Bank of Japan continued to keep policy rates at very low levels. The US Federal Reserve delivered three interest rate hikes in 2017, raising the policy rate by a total of 0.75% to 1.50% by year-end. In 2018, the Fed is expected to continue raising policy rates, with the market anticipating a total of .50-0.75% in hikes for the year.


Cash and cash equivalents

Financial assets at FVPL*

Loans and receivables

Accrued income

Total Assets

Net Asset Value (NAV)

*Fair Value Through Profit or Loss

76,263,348 1,868,017,617

- 23,193,207

1,967,474,173

6,810,394 6,810,394

1,960,663,779 11,299,735,732 3,813,408,349 2,736,517,180 7,001,642,852 41,466,463 161,390,754

49,280,979 49,280,979

7,128,885 7,128,885

13,231,355 13,231,355

2,536,784 2,536,784

--

--

473,533,778 10,805,267,798

61,452,858 8,762,277

11,349,016,711

35,656,534 3,762,842,758

7,085,274 14,952,668

3,820,537,234

- 161,390,754

- -

161,390,754

- 41,466,463

- -

41,466,463

- 2,749,748,534

- -

2,749,748,534

- 7,004,179,636

- -

7,004,179,636

Philam Life Peso Variable Funds

Philam LifeFixed Income

Fund

Philam LifeEquity Fund

Philam LifeBalanced

Fund

GrowthInvest

Fund 2

GrowthInvestFund 3

PAMIPhilam Bond

Fund

PAMIPhilamFund

ASSETS

Accounts payable andaccrued expenses

LIABILITIES

Total Liabilities

PAMI PhilamStrategic

Growth Fund

- 19,064,970,885

- -

19,064,970,885

8,731,398 8,731,398

19,056,239,487

PAMI PhilamEquity Index

Fund

- 4,103,501,731

- -

4,103,501,731

4,092,146,747

11,354,984 11,354,984

FINANCIAL STATEMENTAs of December 31, 2017

STATEMENT OF ASSETS AND LIABILITIES


Cash and cash equivalents

Financial assets at FVPL*

Loans and receivables

Accrued income

Total Assets

Net Asset Value (NAV)

*Fair Value Through Profit or Loss

$974,380 7,838,8986,014,391

89,102

$14,916,770

$5,898,372 5,898,372

$9,018,398 $76,499,119 $19,634,270

$283,471283,471

--

$7,871,93267,889,568

-1,021,090

$76,782,589

-$19,634,270

--

$19,634,270

Philam Life Dollar Variable Funds

STATEMENT OF ASSETS AND LIABILITIES

FINANCIAL STATEMENTAs of December 31, 2017

ASSETS

Accounts payable andaccrued expenses

LIABILITIES

Total Liabilities

Philam LifeDollar Bond

Fund

Philam LifeGlobal Bond

Fund

High-WaterMark Fund

2019


Fund Description

Fund Performance*

FIXED INCOME SECURITIES (as of Dec 31, 2017)

PORTFOLIO MIX* (as of Dec 31, 2017)

PORTFOLIO STATISTICS (as of Dec 31, 2017)

NAVPU Since Inception

The Philam Life Fixed Income Fund (PFIF) is a peso-denominated investment fund created for variable life insurance contracts issued by The Philam 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. Its investment objective is to provide stable income over the medium- to long-term, and preserve capital by investing primarily in peso-denominated fixed-income securities issued by the government and reputable corporate issuers.

NAV in PHP 1,960,663,779NAVPU 2.0786 Weighted Duration (in years) 5.35 Weighted Tenor/Maturity (in years) 7.77 Weighted Average YTM 4.28%

Cash & Cash Equivalents 4.69%Corporate Securities 10.21%Philippine Issued Peso Government Bonds 85.10%* Fund returns are calculated based on Net Asset Value (NAV) per Unit (NAVPU)

Past performance is not indicative of future performance.

* Based on Audited Financial Statement. NAV is net of 2.0% fund management charge, transaction cost, and audit fees.

* Excluding accrued income

Top 10 Issues Maturity % of PortfolioPH Issued PHP Govt Bonds 7/19/2031 16.81%PH Issued PHP Govt Bonds 1/14/2036 9.00%PH Issued PHP Govt Bonds 10/24/2037 8.40%PH Issued PHP Govt Bonds 11/22/2019 7.98%PH Issued PHP Govt Bonds 12/4/2022 7.96%PH Issued PHP Govt Bonds 1/15/2021 5.47%PH Issued PHP Govt Bonds 4/11/2020 5.35%PH Issued PHP Govt Bonds 1/26/2022 5.22%PH Issued PHP Govt Bonds 9/9/2025 4.93%Ayala Land Inc 1/30/2024 2.64%

0.8

1.1

1.3

1.6

1.8

2.1

2.3

Nov-

04

Sep-

05

Aug-

06

Jun-

07

May

-08

Mar

-09

Feb-

10

Dec-

10

Nov-

11

Sep-

12

Aug-

13

Jun-

14

May

-15

Mar

-16

Feb-

17

Dec-

17

2017 Return -0.56%2016 Return 0.67%2015 Return -2.00%2014 Return 4.51%2013 Return 5.22%2012 Return 7.37%2008 Return -1.92%2007 Return 1.11%2006 Return 17.88%3 Years Return (annualized as of Dec 31, 2017 -0.64%5 Years Return (annualized as of Dec 31, 2017) 1.53%Return since Inception (annualized as of Dec 31, 2017) 5.73%

PHILAM LIFEFIXED INCOME FUND

Fund Inception Date: November 10, 2004


Fund Description

Fund Performance*





The Philam Life Equity Fund (PEF) is a peso-denominated investment fund created for variable life insurance contracts issued by 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. Its investment objective is to achieve capital growth by investing in an efficient and diversified portfolio of predominantly growth companies while including appropriate value stocks.

Since NAV in PHP 11,299,735,732NAVPU 3.9862

Cash & Cash Equivalents 4.43%Common Stocks 95.57%

* Fund returns are calculated based on NAVPU Past performance is not indicative of future performance.



Top 10 Issues % of PortfolioSM Investments Corporation 11.20%Ayala Land Inc 8.48%BDO Unibank Inc 7.84%SM Prime Holdings Inc 7.82%Ayala Corporation 7.18%JG Summit Holdings Inc 5.02%Bank of the Philippine Islands 4.43%Aboitiz Equity Ventures 4.20%Metropolitan Bank & Trust Co 4.03%Universal Robina Corporation 3.60%

2017 Return 21.38%2016 Return -2.71%2015 Return -5.72%2014 Return 19.09%2013 Return -5.55%2012 Return 24.44%2008 Return -36.97%2007 Return 19.56%2006 Return 40.97%3 Years Return (annualized as of Dec 31, 2017) 3.64%5 Years Return (annualized as of Dec 31, 2017) 4.60%Return since Inception (annualized as of Dec 31, 2017) 11.10%

0.8 1.2 1.6 2.0 2.4 2.8 3.2 3.6 4.0 4.4

Nov-

04

Sep-

05

Aug-

06

Jun-

07

May

-08

Mar

-09

Feb-

10

Dec-

10

Nov-

11

Sep-

12

Aug-

13

Jun-

14

May

-15

Mar

-16

Feb-

17

Dec-

17

PHILAM LIFEEQUITY FUND

Fund Inception Date: November 10, 2004HELPING PEOPLE LIVE LONGER, HEALTHIER AND BETTER LIVES

0.5

0.8

1.0

1.3

1.5

1.8

2.0

2.3

May

-07

Jul-0

8

Sep-

09

Nov

-10

Jan-

12

Mar

-13

May

-14

Jul-1

5

Sep-

16

Dec

-17

Fund Description

Fund Performance*






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

Since

NAV in PHP 3,813,408,349 NAVPU 1.9421

Cash & Cash Equivalents 1.21%Philippine Issued Peso Government Bonds 36.95%Common Stocks 61.84%




PHILAM LIFEBALANCED FUND

Fund Inception Date: May 22, 2007

Top 10 Issues % of PortfolioSM Investments Corporation 11.95%Ayala Land Inc 8.56%SM Prime Holdings Inc 8.04%BDO Unibank Inc 7.94%Ayala Corporation 6.19%JG Summit Holdings Inc 5.12%Bank of the Philippine Islands 4.73%Aboitiz Equity Ventures 4.42%Metropolitan Bank & Trust Co 3.88%PLDT, Inc 3.22%

Top 10 Issues Maturity % of PortfolioPH Issued PHP Govt Bonds 4/11/2020 21.39%PH Issued PHP Govt Bonds 12/4/2022 14.13%PH Issued PHP Govt Bonds 4/21/2023 13.32%PH Issued PHP Govt Bonds 11/22/2019 10.63%PH Issued PHP Govt Bonds 3/20/2021 10.30%PH Issued PHP Govt Bonds 2/19/2019 8.97%PH Issued PHP Govt Bonds 8/18/2018 7.19%PH Issued PHP Govt Bonds 1/12/2020 7.02%PH Issued PHP Govt Bonds 1/31/2018 3.56%PH Issued PHP Govt Bonds 11/26/2022 3.50%

2017 Return 12.41%2016 Return -1.57%2015 Return -3.50%2014 Return 13.09%2013 Return -4.31%2012 Return 23.90%3 Years Return (annualized as of Dec 31, 2017) 2.21%5 Years Return (annualized as of Dec 31, 2017) 2.93%Return since Inception (annualized as of Dec 31, 2017) 6.45%


Fund Description

Fund Performance*





The Philam Life Dollar Bond Fund (PALDBF) is a US dollar-denominated investment fund created for dollar variable life insurance contracts issued by Philam Life. The PALDBF is an investment option for the variable life policyholder with a preference for investing in US dollar-denominated 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.

Since NAV in USD 76,499,119NAVPU 2.0969 Weighted Duration (in years) 5.38 Weighted Tenor/Maturity (in years) 7.72 Weighted Average YTM 2.55%

Cash & Cash Equivalents 10.36%Foreign Bond Securities 34.61%Philippine Issued Dollar Government Bonds 55.02%* Fund returns are calculated based on NAVPU




PHILAM LIFEDOLLAR BOND FUND

Fund Inception Date: July 12, 2005

2017 Return 3.07%2016 Return 0.37%2015 Return 1.29%2014 Return 7.54%2013 Return -8.57%2012 Return 10.14%2008 Return -2.43%2007 Return 5.53%3 Years Return (annualized as of Dec 31, 2017) 1.57%5 Years Return (annualized as of Dec 31, 2017) 0.60%Return since Inception (annualized as of Dec 31, 2017) 6.12%

Top 10 Issues Maturity % of PortfolioPH Issued US$ Govt Bonds 10/23/2034 10.32%PH Issued US$ Govt Bonds 3/1/2041 8.79%PH Issued US$ Govt Bonds 1/14/2031 7.35%ICTSI Treasury B.V. 1/16/2023 6.86%PH Issued US$ Govt Bonds 2/2/2030 6.28%PH Issued US$ Govt Bonds 1/15/2021 6.18%PH Issued US$ Govt Bonds 3/30/2026 5.65%PH Issued US$ Govt Bonds 1/21/2024 4.82%SM Investments Corporation 10/17/2019 4.54%JG Summit Holdings, Inc 1/23/2023 4.11%

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

Jul-0

5

Jun-

06

Jun-

07

May

-08

May

-09

Apr-1

0

Apr-1

1

Mar

-12

Mar

-13

Feb-

14

Feb-

15

Jan-

16

Jan-

17

Dec-

17


Fund Description

Fund Performance*





The Philam Life Global Bond Fund (PALGBF) is a US dollar-denominated investment fund created for dollar variable life insurance contracts issued by Philam Life. The PALGBF is an investment option for the variable life policyholder with a preference for investing in US dollar-denominated 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.

NAV in USD 9,018,398NAVPU 1.5918 Weighted Duration (in years) 2.44 Weighted Tenor/Maturity (in years) 3.51 Weighted Average YTM 2.11%

Cash & Cash Equivalents 10.81%Foreign Corporate Securities 89.19%




PHILAM LIFEGLOBAL BOND FUND


2017 Return 2.05%2016 Return 1.48%2015 Return 0.16%2014 Return 3.40%2013 Return -4.28%2012 Return 11.70%2008 Return -4.96%2007 Return 3.49%3 Years Return (annualized as of Dec 31, 2017) 1.23%5 Years Return (annualized as of Dec 31, 2017) 0.53%Return since Inception (annualized as of Dec 31, 2017) 3.80%

Top 10 Issues Maturity % of PortfolioChina Cinda Finance 5/14/2024 8.84%Reliance Hdg USA 2/14/2022 6.92%Charming Light Invest 9/3/2024 6.85%China Overseas Finance 11/10/2020 6.80%Bangkok Bank 10/18/2020 6.03%China Overseas Finance 10/29/2023 5.60%Siam Commercial Bank 4/7/2019 5.15%CITIC Ltd 1/17/2023 4.41%Talent Yield Invest 4/25/2022 4.02%PCCW Capital 4/17/2022 2.77%

0.9

1.1

1.2

1.4

1.5

1.7

Jul-0

5

Jun-

06

Jun-

07

May

-08

May

-09

Apr-1

0

Apr-1

1

Mar

-12

Mar

-13

Feb-

14

Feb-

15

Jan-

16

Jan-

17

Dec-

17


Fund Description

Fund Performance*




The Philam Life High-Water Mark (HWM) Fund 2019 is a US dollar-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.

NAV in USD 19,634,270NAVPU 1.2028Remaining Life (in years) 1.53


* Based on Audited Financial Statement. NAV is net of 2.2% administrative charge.

PHILAM LIFEHIGH-WATER MARK FUND 2019 (or Prime Yield)

Fund Inception Date: May 13, 2009

2017 Return -1.35%2016 Return -1.20%2015 Return -0.05%2014 Return 0.73%2013 Return -3.73%2012 Return 5.06%3 Years Return (annualized as of Dec 31, 2017) -0.87%5 Years Return (annualized as of Dec 31, 2017) -1.13%Return since Inception (annualized as of Dec 31, 2017) 2.16%

Matual Fund % of PortfolioAberdeen Global World Equity Fund 35.00%Aberdeen Global EM Equity Fund 7.50%BlackRock Global Funds - Global SmallCap Fund 7.50%Parvest US Dollar Bond Fund 16.00%Pimco Total Return Bond Fund 16.00%MFS Meridian EM Debt Fund 8.00%PIMCO Funds Glb Investors - Glb Real Return Fund 10.00%

1.0

1.1

1.2

1.3

May

-09

Apr

-10

Apr

-11

Mar

-12

Mar

-13

Feb-

14

Feb-

15

Jan-

16

Jan-

17

Dec

-17


Fund Description

Fund Performance*



The Philam Life Growth Invest Fund is a peso-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 affiliated with 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).

NAV in PHP 161,390,754NAVPU 0.7689Remaining Life (in years) 0.03



PHILAM LIFEGROWTH INVEST FUND 2

Fund Inception Date: January 11, 2012

2017 Return 1.41%2016 Return 0.20%2015 Return 0.16%2014 Return 0.52%2013 Return -12.97%3 Years Return (annualized as of Dec 31, 2017) 0.59%5 Years Return (annualized as of Dec 31, 2017) -2.30%Return since Inception (annualized as of Dec 31, 2017) -4.31%

0.7

0.8

0.9

1.0

1.1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Jun-

16

Dec

-16

Jun-

17

Dec

-17


Fund Description

Fund Performance*



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).

NAV in PHP 41,466,463NAVPU 0.7461Remaining Life (in years) 0.53



PHILAM LIFEGROWTH INVEST FUND 3


2017 Return 0.72%2016 Return -0.04%2015 Return -2.95%2014 Return -0.24%2013 Return -15.43%3 Years Return (annualized as of Dec 31, 2017) -0.77%5 Years Return (annualized as of Dec 31, 2017) -3.79%Return since Inception (annualized as of Dec 31, 2017) -5.21%

0.7

0.8

0.9

1.0

1.1

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Jun-

16

Dec

-16

Jun-

17

Dec

-17


Fund Description

Fund Performance*





The PAMI Philam Bond Fund is a PHP-denominated single asset fund invested in Philam Asset Management Inc.'s PAMI Bond Fund (PBF). The investment focus of the fund is capital preservation with returns and inflows derived out of investments in fixed income instruments. The fund considers medium to long-term investment horizons for its shareholders.

NAV in PHP 2,736,517,180NAVPU 4.0499

Cash & Cash Equivalents 9.49% Philippine Issued Peso Government Bonds 77.36% Corporate Securities 13.15%




PAMI PHILAM BOND FUNDFund Inception Date: August 1, 2012

2017 Return 0.10%2016 Return 1.52%2015 Return -0.91%2014 Return 1.99%2013 Return 6.01%3 Years Return (annualized as of Dec 31, 2017) 0.23%5 Years Return (annualized as of Dec 31, 2017) 1.71%Return since Inception (annualized as of Dec 31, 2017) 2.43%

Top 10 Issues of PBF Maturity % of PortfolioPH Issued PHP Govt Bonds 7/19/2031 9.38%PH Issued PHP Govt Bonds 4/21/2023 4.68%PH Issued PHP Govt Bonds 3/20/2021 4.54%PH Issued PHP Govt Bonds 1/14/2036 4.19%PH Issued PHP Govt Bonds 9/9/2025 3.60%3.5

3.8

4.0

4.3

4.5

Aug

-12

May

-13

Feb-

14

Nov

-14

Aug

-15

Jun-

16

Mar

-17

Dec

-17


Fund Description

Fund Performance*


COMMON STOCKS (as of Dec 31, 2017)




The PAMI Philam Fund is a PHP-denominated single asset fund invested in Philam Asset Management Inc.'s PAMI Fund (PFI). The fund is a moderate type of investment dealing with equity securities and fixed income instruments. An adequate portion of the portfolio will be invested in cash or near cash assets to ensure that redemptions will be adequately and immediately serviced. An investment in a balanced fund should be regarded as long term in nature and only suitable for sophisticated investors who understand and appreciate the risk involved.

NAV in PHP 7,001,642,852NAVPU 17.5591

Common Stocks 61.15%Philippine Issued Peso Government Bonds 38.85%




2017 Return 11.47%2016 Return -1.47%2015 Return -4.74%2014 Return 13.45%2013 Return -8.76%3 Years Return (annualized as of Dec 31, 2017) 1.52%5 Years Return (annualized as of Dec 31, 2017) 1.61%Return since Inception (annualized as of Dec 31, 2017) 1.75%

Issue Maturity % of PortfolioPH Issued PHP Govt Bonds 7/19/2031 5.51%PH Issued PHP Govt Bonds 5/23/2018 3.46%PH Issued PHP Govt Bonds 12/16/2035 2.19%PH Issued PHP Govt Bonds 3/20/2021 2.18%PH Issued PHP Govt Bonds 1/14/2036 1.51%

Top 10 Issues of PFI % of Portfolio SM Investments Corporation 7.19% Ayala Land Inc 4.93% SM Prime Holdings Inc 4.76% Ayala Corporation 4.33% BDO Unibank Inc 4.25%

PAMI PHILAM FUNDFund Inception Date: August 1, 2012

14.0

15.5

17.0

18.5

20.0

Aug

-12

May

-13

Feb-

14

Nov

-14

Aug

-15

Jun-

16

Mar

-17

Dec

-17


Fund Description

Fund Performance*





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). The investment objective of the fund is capital growth with returns and inflows derived out of investments in equity securities. PSGF considers a medium to long-term investment horizon for its shareholders. The fund will be positioned to compete directly with other full equity funds.

NAV in PHP 19,056,239,487NAVPU 588.5300

Common Stocks 91.06% Philippine Issued Peso Government Bonds 8.94% * Fund returns are calculated based on NAVPU




2017 Return 20.03%2016 Return -3.06%2015 Return -6.44%2014 Return 17.71%2013 Return -8.45%3 Years Return (annualized as of Dec 31, 2017) 2.87%5 Years Return (annualized as of Dec 31, 2017) 3.25%Return since Inception (annualized as of Dec 31, 2017) 3.68%

PAMI PHILAM STRATEGIC GROWTH FUND

Fund Inception Date: August 1, 2012

420.0

470.0

520.0

570.0

620.0

Aug

-12

May

-13

Feb-

14

Nov

-14

Aug

-15

Jun-

16

Mar

-17

Dec

-17

Top 10 Issues of PSGF % of Portfolio SM Investments Corporation 10.09% Ayala Land Inc 7.54% SM Prime Holdings Inc 7.05% BDO Unibank Inc 7.00% Ayala Corporation 6.60% JG Summit Holdings Inc 4.51% Bank of the Philippine Islands 4.04% Aboitiz Equity Ventures 3.82% Metropolitan Bank & Trust Co 3.68% Metro Pacific Investments Corp 3.30%


Fund Description

Fund Performance*





The PAMI Philam Equity Index Fund is a peso-denominated single asset fund invested in Philam Asset Management Inc.'s PAMI Equity Index Fund (PEIF). It aims to invest in the top 30 corporations that compose the PSEi in such proportion that the performance of the fund attempts to replicate that of the PSEi. The Fund will capitalize on the long-term growth prospects of the Philippine economy.

SNAV in PHP 4,092,146,747NAVPU 1.1076

Cash & Cash Equivalents 4.93% Common Stocks 95.07%




2017 Return 24.32%2016 Return -2.85%Return since Inception (annualized as of Dec 31, 2017) 4.13%

PAMI PHILAM EQUITY INDEX FUND

Fund Inception Date: June 22, 2015

0.8

0.9

1.0

1.1

Jun-

15

Sep

-15

Dec

-15

Mar

-16

Jun-

16

Sep

-16

Dec

-16

Mar

-17

Jun-

17

Sep

-17

Dec

-17

Top 10 Issues of PEIF % of Portfolio SM Investments Corporation 12.56% SM Prime Holdings Inc 8.14% Ayala Land Inc 7.99% BDO Unibank Inc 7.58% Ayala Corporation 5.93% JG Summit Holdings Inc 4.99% Bank of the Philippine Islands 4.90% Aboitiz Equity Ventures 4.41% PLDT, Inc 3.83% Metropolitan Bank & Trust Co 3.78%


DISCLOSURE STATEMENT

Readership: This document is intended solely for the addressee(s). Its content may be legally privileged and/or confidential. This material 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 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.

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.

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