DR. VICENTE K. FABELLA

Treasurer

Fiscal Year May 1, 2014 to April 30, 2015

In review

Macro-fundamentals remain strong

More investment credit rating upgrades (S&P, Moody’s)

Fastest-growing economy in EM Asia this year and next - Fitch

PHL seen outpacing peers till 2016 – Standard & Poor’s (S&P)

Found most resilient emerging market - Center for Global

Development in US

Lead Southeast Asian growth into 2016- IMF

Robust investment market

successful IPOs such as SSI, CNPF, PSPC & X

Php153.5Bn corporate bond issuance

Happenings abroad

May 2014 - Ukraine tension

June 2014 - Iraq crisis pushed global oil prices at high levels

June 2014 - Anxiety on US Federal Reserve’s rate hike

October 2104 - End of US Fed tapering

April 2015- Greece debt woes

Local events

Truck ban that led to port congestion

Government underspending, delayed PPP projects

El Niño phenomenon

Strong typhoons damaging agriculture and shutting down

market trading -- Glenda & Ruby (int’l name Hagupit)

6,000.00

6,500.00

7,000.00

7,500.00

8,000.00

8,500.00

May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15

-PHL found most

resilient EM

-Moody’s ups PHL

forecast

- S&P raises

Phl outlook

due to 6.4%

2QGDP

Delay in US interest

rate hike to happen

1Q15

The local equity market at a glance… (FY May 2014-April 2015)

PERAA’s growth drivers (FY May 2014 - April 2015)

PERAA changed asset focus, considered new investments into

the asset allocation

Real Estate

Global Equity

Global Fixed Income

20%

9%

41%

3%

8% 6%

2%

11%

16%

7%

44%

7%

2% 2% 2%

21%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Domestic EQ Global EQ Domestic FI ROPs Global FI Real Estate MPL Cash

Comparative Asset Allocation

Apr-15 Apr-14

Investors favored developed market and country-specific

allocation instead of the entire EM region

Increase US$ exposure

tap services of foreign fund managers (FFM)

(600,000)

(500,000)

(400,000)

(300,000)

(200,000)

(100,000)

-

100,000

200,000

300,000

Interest

Income

Forex Gains,

net

Realized

gains, net

Unrealized

Gains

FY - 2015 FY- 2014

Return On Investment (ROI)

FY 2014 1.06% ROI

vs

FY 2015 5.52% ROI

What pulled the fund up?

Steady flow of interest

income

Consistent trading gains

Favorable valuations

Fund Performance

April 2015

April 2014

Assets P6.52 Bn P6.29 Bn

Members’ Equity P5.89 Bn P5.66 Bn

Investment Earnings

Net Unrealized Gain (Loss) on AFS Inv.

Net Investment Earnings

P317.63 Mn

43.43Mn

P 361.06 Mn

P394.96 Mn

(496.38) Mn

P(101.42) Mn

Total PIs 1,843 1,827

Total Member-Employees 72,070 71,885

ROI 5.52% 1.06%

Investment Portfolio

As of April 2015

24%

2%

20%

9%

26%

6%

2% 11%

Peso Gov't. Debt Securities

Foreign Gov't. Debt Securities

Peso Corporate Debt Securities

Dollar Corporate Debt Securities

Equity

Real Estate

MPL

Cash and Cash Equivalents

PERAA vs OTHER FUNDS

MANAGING INVESTMENT STRATEGY

PRESERVATION OF CAPITAL

GROWTH

Savings Account

Time Deposits

Fixed Income

Equity

Alternative investments

EQUITY FUND vs PERAA

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

ALFMGrowth

Fund, Inc.

PhilamStrategicGrowth

Fund, Inc.

PhilequityDividend

Yield Fund.,Inc.

PhilippineStock IndexFund Corp.

PSEi PERAA

Apr 2015 Sep 2015

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

ALFM PesoBond Fund,

Inc.

Cocolife FixedIncome Fund,

Inc.

Philam BondFund, Inc.

PrudentialifeFixed Income

Fund, Inc.

PERAA

Apr 2015 Sep 2015

FIXED INCOME FUND vs PERAA

BALANCED FUND vs PERAA

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

PAMI HorizonFund, Inc.

Philam Fund, Inc. Sun Life ofCanada

ProsperityBalanced Fund,

Inc.

PERAA

Apr 2015 Sep 2015

Fiscal Year May 1, 2015-

April 30, 2016

Looking ahead

6,000

6,500

7,000

7,500

8,000

-PHL found most

resilient EM

-Moody’s ups PHL

forecast

- S&P raises

Phl outlook

due to 6.4%

2QGDP

Delay in US interest

rate hike to happen

on 1Q15

-Chinese stocks sell-off

-Debt woes in Greece

Yuan devaluation

Where is the market’s next direction…is the

Philippines immune?

PSEi levels May 2014 to September 2015

While the PHL market is not isolated

from global slowdown, PERAA remained

prudent and vigilant

(0.1)

(0.1)

(0.0)

(0.0)

0.0

0.0

0.0

0.1

0.1

PSEi PERAA

Fund Performance

September 2015

Assets P6.38Bn

Members’ Equity P5.79Bn

Investment Earnings

Net Unrealized Gain (Loss) on AFS Inv.

Net Investment Earnings

P139.72Mn (187.61Mn) P(47.89Mn)

Total PIs 1,930

Total Member-Employees 72,291

ROI -2.68%

Investment Portfolio

As of September 2015

23%

6%

17%

9%

25%

6%

2% 12%

Peso Gov't. Debt Securities

Foreign Gov't. Debt Securities

Peso Corporate Debt Securities

Dollar Corporate Debt Securities

Equity

Real Estate

MPL

Cash & Cash Equivalent

Challenges ahead US Federal Reserve interest rate hike

China’s slowing economy

Yuan devaluation

Geopolitical crisis

Slowing PHL GDP and inflation

El Niño phenomenon

Traffic

Credibility of 2016 Presidential election

Mitigating Risk

Strategically favor safe assets such as cash & bonds

Reinvest in bonds when yields start picking up

Gradually accumulate and raise exposure to stocks

for cost-averaging tactic for both global & domestic

investments

Favor $US for currency play

Campaign for MPL

Thank you!!!