ALFM Money Market Fund

0
AMENDED PROSPECTUS
ALFM Money Market Fund
17/F, BPI Head Office Building,
Ayala Avenue corner Paseo de Roxas, Makati City 1226
Tel No. (02) 845-5424

(An Open-end investment company organized under Philippine Laws)

An Offer of up to the Number of Authorized Shares of
ALFM Money Market Fund at an Offer Price of Net Asset Value per Share
on the date of subscription

ALFM MONEY
MARKET FUND
Number of Authorized Shares 20,000,000
Minimum Initial Investment PHP 5,000.00*
PAR value PHP 10.00

*for Regular Subscription Plan (RSP), Php10,000.00 if without RSP

Securities will be traded over the counter through
SEC accredited mutual fund sales agents

BPI Investment Management, Inc.
Fund Manager
17/F BPI Head Office Bldg., Ayala Avenue corner Paseo de Roxas, Makati City
Tel. No. (02) 845-5424

BPI Capital Corporation, Tel. Nos. (02) 845-5695 to 98
BPI Investment Management, Inc., Tel. Nos. (02) 845-5033 to 35
BPI Securities Corporation, Tel. Nos. (02) 816-9190 or 816-9192
BPI Head Office Building, Ayala Avenue corner Paseo de Roxas, Makati City
Distributors

*The date of this PROSPECTUS is May 17, 2013.*

THESE SECURITIES SHALL BE SOLD AND REDEEMED ONLY THROUGH THE FUNDS
DISTRIBUTORS. THE FUNDS SHARES SHALL NOT BE LISTED NOR TRADED ON THE
PHILIPPINE STOCK EXCHANGE. SHARES OF THE FUND ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY FINANCIAL
INSTITUTION, AND ARE NOT INSURED WITH THE PHILIPPINE DEPOSIT INSURANCE
CORPORATION.

1
T TA AB BL LE E O OF F C CO ON NT TE EN NT TS S

The Offer 2 2

Summary of Financial Information 7 7

Risk Disclosure Statement 8 8

Risk Factors and Investment Considerations 9 9

Principal Parties to the Offer 1 11 1

Definition of Terms 1 12 2

Terms and Conditions of the Offer 1 15 5

Company Background 1 17 7

Description of Capital Stock 1 19 9

Directors, Officers, and Significant Shareholders 2 23 3

Principal Parties 3 30 0
The Fund Manager 3 30 0
The Investment Advisor 3 32 2
The Custodian Bank 3 32 2
The Receiving Banks 3 32 2

Mechanics of the Fund 3 33 3
Purchase of Shares 3 33 3
Redemption of Shares 3 33 3
Valuation and Accounting Procedures 3 34 4
Determination of the Funds Net Asset Value 3 34 4
Taxation 3 35 5

Investment Objectives and Restrictions of the Fund 3 36 6

Philippine Laws Applicable to the Company 3 38 8

Government Policies and Regulations 4 40 0

Management Discussion or Analysis on Plan of Operations 4 41 1

2
T TH HE E O OF FF FE ER R


(The Fund is incorporated under the laws of the Republic of the Philippines)
_________________________

The following summary about the Fund and the Offer is qualified by detailed information appearing
elsewhere in this Prospectus. Cross references in this summary are to headings in the Prospectus.

This document relates to an Offer for subscription to the shares of common stock of the ALFM Money
Market Fund.

For this registration statement, 10,000,000 shares of common stock of par value PhP10.00 each (the
Offer Shares) in the capital stock of ALFM Money Market Fund, Inc. (ALFM Money Market or the
Fund) at the Funds prevailing Net Asset Value (NAV) per share, plus any applicable sales load, on
the date of sale of the shares, are being offered for sale. This is in addition to the 10,000,000 shares
previously offered. In total, up to 20,000,000 shares of common stock of par value PhP10.00 each
(the Offer Shares) in the capital stock of the Fund at the Funds prevailing Net Asset Value (NAV)
per share, plus any applicable sales load, on the date of sale of the shares, are being offered. The
Fund may terminate the Offer at any time or when the number of Shares subscribed and paid for has
reached 20,000,000 shares.

The Fund was incorporated on October 19, 2009 with an authorized capitalization of PhP 20.0 Million
consisting of 2,000,000 shares with par value of PhP 10.00 each. In November 18, 2010, the Fund
gained approval to increase its authorized capitalization to Php 50.0 Million consisting of 5,000,000
shares with par value of Php 10.00 each. Another increase was approved on November 17, 2011,
increasing the authorized capital of the Fund to Php 100 Million consisting of 10,000,000 shares with
par value of Php 10.00 each. As of today, the authorized capitalization stands at PhP 200.0 Million
consisting of 20,000,000 shares with a par value of PhP 10.00 each, as approved on November 12,
2012.

The ALFM Money Market Fund, Inc. (ALFM Money Market or the Fund) is a domestic corporation
duly authorized to operate as an open-end investment company. The Fund has entered into a
Management and Distribution Contract with BPI Investment Management, Inc. authorizing BPI
Investment to purchase and sell investment securities for the account of the Fund. The Fund does not
have employees of its own since the management and administrative functions are already being
handled by BPI Investment. The Fund has adopted a Manual of Corporate Governance and an Anti-
Money Laundering Operating Manual. Quarterly reporting of the Funds operations to the Board of
Directors is being performed by BPI Investment to properly identify, assess and manage risks that
may arise any time during the Funds daily operations. ALFM Money Market does not own any
property such as real estate, plant and equipment, mines, patents, etc. required to be disclosed under
Annex C of SRC Rule 12.1.

The investment objective of the Fund is to seek capital preservation and stable income and to achieve
a net rate of return that exceeds the HSBC Philippine Money Market Index.

Use of proceeds

The total proceeds from the sale of the 10,000,000 new shares is estimated at PhP 1.1103 Billion
(using PhP 111.03 NAVPS as of May 16, 2013), which shall be used to purchase securities such as
short-term bonds and money market instruments in accordance with the investment objective,
policies, and limitations of the Fund (see section on Investment Objective). The Funds main
business is to invest the proceeds in short-term bonds and money market instruments in line with the
Funds investment objectives. Total expenses paid out or projected to be paid out of the gross
proceeds are the following: PhP2,380,428.63 for trust and other professional fees, and filing fee &
business registration license of PhP1,130,714.50.

3
The Custodian Bank shall hold the relevant securities of the Fund including subscription payments or
proceeds from the sale of this security, until they can be invested in marketable securities consistent
with the Fund's objectives. No other funds outside the proceeds of this offer shall be needed to
accomplish the Funds investment objective. There is no material amount out of the proceeds of the
offer that is to be used to discharge debt, acquire assets or finance the acquisition of other business,
or to reimburse any officer, director, employee or shareholder for services rendered, assets previously
transferred, money loaned or advanced. Expenses to be deducted from the gross proceeds primarily
include filing and registration fees, management fees, professional fees for the external auditor, third
party fees such as custody fees and business renewal fees.

THE OFFER SHARES

All of the Shares in issue or to be issued pursuant to the Offer have, or upon issue will have, identical
rights and privileges. These are outlined in the section on Description of Capital Stock (page 20).
The Offer Shares may be owned by any person regardless of citizenship or nationality, subject to the
subsection on Eligible Investors under the section headed Terms and Conditions of the Offers
(page 16).

Prospective investors in the Fund should carefully consider the matters addressed under Risk
Factors and Investment Considerations (page 9) before making an investment. These risks include,
but are not limited to, market risk, interest rate risk, liquidity risk, credit risk, inflation risk, and the risk
that the value of the Funds are not guaranteed and not insured with the Philippine Deposit Insurance
Corporation.

REDEMPTIONS

The Fund is ready to redeem, at the applicable Net Asset Value per Share, all or any part of the
Shares standing in the name of a Shareholder in the Fund. Unless redeemed earlier than the
minimum holding period of 30 days, when an early redemption fee of 1% will apply, there is no
redemption fee.

SEC MEMORANDUM CIRCULARS

SEC Memorandum Circular # 7, Series of 2005, which was amended by SEC Memorandum Circular
# 10, Series of 2006, allows mutual funds to invest up to 100% of their net assets in bonds and other
evidences of indebtedness registered and traded in an organized market in a foreign country, subject
to the standards set by the Commission and provided that the issuers thereof have a long-term
foreign currency rating of at least BBB from a reputable credit rating agency.

TOTAL EXPENSES OF THE FUNDS

The total expenses paid out or projected to be paid out of the gross proceeds of the Offer are for filing
fees, registration fees, legal research fees, business registration licenses, notarial fees, legal opinion
and assistance fees, external auditors fees, and management fees.

RESTRICTIONS ON THE USE OF PROCEEDS

No other funds outside the proceeds of this Offer shall be needed to accomplish the Funds
investment objectives. There is no material amount of the proceeds of these Offers that is to be used
to discharge any debt, acquire assets or finance the acquisition of other businesses, or to reimburse
any director, shareholder, officer, or employee of the Fund for services rendered, assets previously
transferred, or money loaned or advanced.

4
VALUATION

The Funds investments are valued marked-to-market pursuant to Philippine Accounting Standards
(PAS) Nos. 32 and 39 of the Philippine Financial Reporting Standards (PFRS) which classify the
Funds investment securities as (i) financial assets at fair value through profit or loss, (ii) available-for-
sale securities, (iii) held-to-maturity securities, or (iv) loans and receivables. The NAVPS of the Fund
may fluctuate (i.e., go down or go up) due to changes in the market values of the Funds investments.
Such changes in market values may also be attributable to various factors: internal, external and
those inherent to the Fund. (Please see a more thorough discussion under Risk Factors and
Investment Considerations on page 9).

DIVIDEND POLICY

The Funds policy for distributing dividends follows the provision of the Corporation Code which
generally requires a Philippine corporation with surplus profits in excess of 100% of its paid-up capital
to declare and distribute such surplus to its shareholders in the form of dividends. The Board of
Directors of the Fund has adopted a policy, consistent with the Funds objective of capital
appreciation, to retain the surplus profits of the Fund in the retained earnings account. Such
accumulation is reflected in the computation of the net asset value per share. Shareholders realize
their gains when shares are redeemed. (Please refer to the discussion on Dividends under the section
on Description of Capital Stock on page 20).

FUND MANAGER AND PRINCIPAL DISTRIBUTOR

The Investment Manager (or Fund Manager) and Principal Distributor of the Fund is BPI Investment
Management, Inc. (or BPI Investment). For its services, BPI Investment shall charge a fee of not
more than the rate stipulated below, based on the Net Asset Value of the Fund.

Name of Fund
Management and
Distribution Fee
ALFM Money Market Fund 0.375% p.a.

DISTRIBUTORS

The Funds Shares shall be made available to the public primarily through the Funds authorized
distributors, BPI Capital Corporation, BPI Securities Corporation and BPI Investment Management,
Inc., as well as other authorized and accredited distribution firms. The foregoing companies were
licensed by the Securities and Exchange Commission to distribute mutual fund securities to the
public.

SALES LOADS

Sales Agents of the Funds Distributors shall be entitled to collect a front-end Sales Load, based on
each amount invested by an applicant or Shareholder in the Fund, in such percentages but not
exceeding the rates stipulated below:

Name of Fund

Amount Invested
Maximum
Sales Load
ALFM Money Market Fund Any amount 3.0%

INVESTMENT ADVISOR

The Investment Advisor of the Fund is Bank of the Philippine Islands - Asset Management and Trust
Group (or BPI Asset Management). For its services, BPI Asset Management shall charge a fee of
not more than the rate stipulated below, based on the Net Asset Value of the Fund.

5

Name of Fund
Investment
Advisory Fee
ALFM Money Market Fund 0.375% p.a.

CUSTODIAN BANK

As required under the Investment Company Act, a custodian bank, the Hongkong & Shanghai
Banking Corporation Ltd. (HSBC), has been appointed by the Fund for the purpose of holding
relevant securities of the Fund, including (if applicable) subscription payments or proceeds from the
sale of the Shares, until they can be invested in the appropriate securities consistent with the Funds
objectives. The custodian bank charges the following safe custody fee which is billed monthly based
on the month-end portfolio value:

Scripless 1.5 bps per annum
Physical Certificate or Document 1.0 bps per annum for Fixed Income

The custodian bank also charges the following transaction fees per movement (receipt or delivery) in
the account. These are billed monthly.

Scripless Peso-Denominated, Fixed Income Securities

Via Manual instructions Free of Payment PHP 100.00
Against Payment PHP 200.00

Via file transfer / HSBCnet Free of Payment PHP 50.00
Against Payment PHP 150.00

Physical Certificate or Document Flat Charge of PHP 250.00

RECEIVING BANKS

The Bank of the Philippine Islands and BPI Family Savings Bank have been designated by the Fund
as Receiving Banks where payments for Shares purchased may be made. The receiving banks do
not collect fees for their services.

INDEPENDENT AUDITOR

Isla Lipana & Co. (formerly Joaquin Cunanan & Co.) has been appointed by the Fund as its External
Auditor.

INFORMATION SUPPLIED BY THE FUND

Unless otherwise stated, the information contained in this document has been supplied by the Fund
which accepts full responsibility for the accuracy of the information and confirm, having made all
reasonable inquiries, that to the best of its knowledge and belief, there are no other material facts, the
omission of which would make any statement in this document misleading in any material respect.
Neither the delivery of this document nor any sale made hereunder shall, under any circumstances,
create any implication that the information contained herein is correct as of any time subsequent to
the date hereof.

No dealer, salesman or other person has been authorized by the Fund or by the Distributors to issue
any advertisement or to give any information or make any representation in connection with the
offering or sale of the Offer Shares other than those contained in this document and, if issued, given
or made, such advertisement, information or representation must not be relied upon as having been
authorized by the Fund or the Distributors.
6

This document does not constitute an offer or solicitation by any one in any jurisdiction in which such
offer or solicitation is not authorized or to any person to whom it is unlawful to make any such offer or
solicitation. Each investor in the securities offered hereby must comply with all applicable laws and
regulations in force in the jurisdiction in which it purchases, offers or sells such securities and must
obtain the necessary consent, approval or permission for its purchase, offer or sale of such securities
under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes
such purchase, offer or sale, and neither the Fund nor the Distributors shall have any responsibility
thereof. Foreign investors interested in subscribing to the Offer Shares should inform themselves as
to the applicable legal requirements under the laws and regulations of the countries of their
nationality, residence or domicile and as to any relevant tax or foreign exchange control laws and
regulations which may affect them.

7
S SU UM MM MA AR RY Y O OF F F FI IN NA AN NC CI IA AL L I IN NF FO OR RM MA AT TI IO ON N

The following information was lifted from the Interim Financial Statements of the Fund for the period
ended September 30, 2012 and Audited Financial Statements for the year ending December 31,
2011. The latest financial reports prepared by the Funds external auditor, Isla Lipana & Co., as of
December 31, 2011, appear in Appendix A of this Prospectus. The information set out below should
be read in conjunction with the financial statements and related notes that are attached in this
Prospectus.

ALFM MONEY MARKET FUND

As of March 31, 2013 (Interim)
Balance Sheet Income Statement
Total Assets PhP 910,133,675 Revenues 10,798,353
Total Liabilities 1,255,364 Expenses 2,103,503
Net Income Before
Provision for Tax
8,694,850
Provision for Tax (591,390)
Total Equity 908,878,311 Net Income 8,103,461

Net Asset Value per Share as of March 31, 2013: PhP 110.48

As of December 31, 2012 (Audited)
Total Assets PhP 1,052,178,729 Revenues 28,115,023
Total Liabilities 645,668 Expenses 7,584,586
Net Income Before
Provision for Tax
20,530,438
Provision for Tax (1,130,623)
Total Equity 1,051,533,061 Net Income 19,399,815

Net Asset Value per Share as of December, 2012: PhP 109.65

Total Assets PhP 322,912,620 Revenues PhP 10,837,748
Net Profit Before Provision
for Tax
7,694,905
Provision for Tax (662,949)

Net Asset Value per Share as of December 31, 2011: PhP 106.44

Total Assets PhP 280,065,614 Revenues PhP 9,331,875
Net Profit Before Provision
for Tax
7,551,365
Provision for Tax (1,229,847)

Net Asset Value per Share as of December 31, 2010: PhP 103.02

8
R RI IS SK K D DI IS SC CL LO OS SU UR RE E S ST TA AT TE EM ME EN NT T

GENERAL RISK WARNING

The prices of the securities can and do fluctuate, and any individual security may experience
upward or downward movements, and may even become valueless. There is an inherent risk
that losses may be incurred rather than profit made as a result of buying and selling securities.

Past performance is not a guide to future performance.

There is an extra risk of losing money when securities are bought from smaller companies.
There may be a big difference between the buying price and the selling price of these securities.

An investor deals in a range of investments each of which may carry a different level of risk.

PRUDENCE REQUIRED

This risk warning does not purport to disclose all the risks and other significant aspects of investing in
these securities. An investor should undertake his or her own research and study on the trading of
securities before commencing any trading activity. He/she may request information on the securities
and Issuer thereof from the Commission which are available to the public.

PROFESSIONAL ADVICE

An investor should seek professional advice if he or she is uncertain of, or has not understood any
aspect of, the securities in which to invest or the nature of risks involved in trading securities,
especially high risk securities.

9
R RI IS SK K F FA AC CT TO OR RS S A AN ND D I IN NV VE ES ST TM ME EN NT T C CO ON NS SI ID DE ER RA AT TI IO ON NS S

The NAV of the Fund may fluctuate due to changes in the market values of the Funds investments.
Such changes in market value may be attributable to various factors such as:

A. Factors External to the Fund, listed in the order of importance:

1) Market Risk - the risk that movements in the financial markets will adversely affect the
investments of the Fund. The markets will fluctuate based on many factors, such as the state of
the economy, current events, corporate earnings, interest rate movements. This is also referred
to as price risk. To properly manage price risk, various risk measurement methodologies are
utilized to quantify the potential changes in portfolio value resulting from changes in the security
market prices such as Value at Risk measurement. Risk is, then, monitored and controlled
through the establishment of debt and equity exposure limits and tracking error. Investment
portfolios are also subject to price risk stress testing on a periodic basis.

2) Inflation Risk - the risk that the return of your investments will not keep pace with the increase in
consumer prices. Although there is the possibility that in bearish markets, the investor may incur
losses when bond and stock prices are down, generally the bond and stock markets are able to
recover after some time. Investors are, therefore, advised to ride the cycle because over time,
securities investments are still a proven way to generate capital growth.

3) Interest Rate Risk - the risk that the value of the Funds investments in bonds and fixed income
securities will decline as interest rates rise. Bond prices are inversely related to interest rates. As
interest rates increase, bond prices decrease. To mitigate this risk, the Fund Manger closely
monitors movements in interest rates and takes advantages of opportunities to sell in order to
realize market gains.

4) Credit Risk - the risk that the Funds investments in bonds will decline as the bond issuer may not
be able to pay its debt on interest payment dates and maturity date. Investments undergo a strict
approval process especially for corporate issues. The Fund Manager reviews credit ratings and
ensures that assets are of high quality to minimize this type of risk.

5) Liquidity Risk - the risk that the investments of the Fund cannot be sold or converted into cash
within a reasonable time or in instances where the sale or conversion is possible but not at a fair
price. To mitigate this risk, the Fund observes existing rules and regulations related to
maintaining a certain percentage of the Funds assets in liquid assets.

B. Risks Inherent to the Fund, listed in the order of importance:

1) Investors in an open-end fund are exposed to the risk of dilution, since other investors are allowed
to purchase shares and/or redeem their entire holdings any time. Given this inherent risk, the
Fund Manager tries to lessen the frequency of withdrawals by imposing an early redemption fee
for investors who redeem from the Fund during the stipulated minimum holding period. By doing
this, investors are discouraged to redeem during the minimum holding period, thereby allowing
the Fund Manager to maximize the investments during the said period.

2) Unlike closed-end funds, the investment potential and capability of the Fund is limited by liquidity
constraints as the Fund Manager should always ensure that there are sufficient liquid assets to
service redemptions at any given time.

3) Unlike bank accounts, investment companies / mutual funds are neither insured with the PDIC nor
any other agency of the government, nor guaranteed by the Fund Manager. Before investing in
the Fund, investors are expected to understand that the Fund is not a bank deposit product and
any income, or loss, shall be for the account of the investor. Investors are advised to read the
Prospectus of the Fund, which may be obtained from authorized distributors, before deciding to
invest. The Fund is registered with the Securities and Exchange Commission.
10

4) Mutual funds are subject to "manager risk," which is the potential for a fund to fail to achieve its
objectives due to investment decisions by the Fund Manager, caused by the Fund Managers
ability, or failure, to read the market accurately. To mitigate this risk, the Fund Manager
employs a thorough investment process, considering macroeconomic factors and integrating
them in asset allocation models to optimize the return of the portfolio. The Fund Manager
likewise keeps abreast of current market conditions through various trainings and seminars on
fund management techniques as well as close coordination with various counterparties and
regulators.

11
P PR RI IN NC CI IP PA AL L P PA AR RT TI IE ES S T TO O T TH HE E O OF FF FE ER R

Issuer ALFM Money Market Fund, Inc.
17th Floor, BPI Building, Ayala Avenue cor.
Paseo de Roxas, Makati City

Fund Manager BPI Investment Management, Inc.

Distributors BPI Capital Corporation
BPI Securities Corporation

Investment Advisor

Bank of the Philippine Islands
Asset Management & Trust Group

Receiving Banks Bank of the Philippine Islands
BPI Building, Ayala Avenue cor. Paseo de Roxas
Makati City

BPI Family Savings Bank
BPI Family Savings Bank Building, Paseo de Roxas
cor. dela Rosa St., Makati City

Custodian Bank Hongkong and Shanghai Banking Corp.
The Enterprise Center, Ayala Avenue cor. Paseo de Roxas
Makati City

External Auditor Isla Lipana & Co.
Member firm of PriceWaterhouse
29th Floor, Philamlife Tower

12
D DE EF FI IN NI IT TI IO ON N O OF F T TE ER RM MS S

ALFM Mutual Funds

Application or Account Opening Form

ALFM Peso Bond Fund, Inc.
ALFM Dollar Bond Fund, Inc.
ALFM Euro Bond Fund, Inc.
Philippine Stock Index Fund Corp.
ALFM Growth Fund, Inc.
ALFM Money Market Fund, Inc.

The application for subscription to the Offer Shares in the
form prescribed

BFSB BPI Family Savings Bank
Bn

BPI

BPI Asset Management

BPI Capital
Billion

Bank of the Philippine Islands

Bank of the Philippine Islands Asset Management & Trust
Group

BPI Capital Corporation

BPI Investment BPI Investment Management, Inc.

BPI Securities BPI Securities Corporation

bps basis points (1/100 of 1% or 0.0001)

BSP Bangko Sentral ng Pilipinas

Corporation ALFM Peso Bond Fund, Inc.
ALFM Dollar Bond Fund, Inc.
ALFM Euro Bond Fund, Inc.
Philippine Stock Index Fund Corp.
ALFM Growth Fund, Inc.

Corporation Code The Corporation Code of the Philippines
(Batas Pambansa Blg. 68)

Credit Authority The redemption slip for the Funds Shares, signed by a
Shareholder, authorizing the Receiving Bank to credit the
proceeds from the sale of said Shares into the Shareholders
Settlement Account

Debit Authority The contribution slip for the Funds Shares, signed by an
applicant, authorizing the Receiving Bank to debit said
applicants Settlement Account for the full payment of the
Shares applied for

Depositary Receipt The evidence of ownership of a Shareholders holdings in
the Fund

Distributors BPI Capital Corporation
BPI Securities Corporation

13
Early Redemption Fee

Fund
The redemption fee of 1.0% imposed on redemptions made
by Shareholders during the minimum holding period


Fund Manager


Investment Advisor

Investment Company Act
BPI Asset Management

The Investment Company Act of 1960 (Republic Act No.
2629)

Mn Million

Minimum Holding Period

NAV
The period during which a 1.0% early redemption fee is
charged for redemptions made during the said period, as
follows:

Name of Fund
Minimum Holding
Period
ALFM Money Market Fund 30 days

Net Asset Value, defined as the value of the assets of the
Fund, less the value of the liabilities.

NAV per Share NAV divided by the total number of Shares outstanding,
including deposits for subscription, if there are pending
applications to increase the Authorized Capital Stock

Offer The Offer to the public for subscription to the maximum
number of unclassified and voting common shares of the
Fund at the Offer Price, as follows:

Name of Fund
Maximum Number of
Shares
ALFM Money Market Fund 20,000,000
Offer Price

Offer Shares
The Funds prevailing NAV per Share computed as of end-
of-day on the date of purchase of the Shares, plus the
applicable sales load, to a percentage not exceeding 3.0%

The unclassified and voting common shares of the Fund

Name of Fund
Maximum Number of
Shares

Par Value The par value of the Shares, as shown below:

Name of Fund Par Value (in PhP)
ALFM Money Market Fund 10.00

PAS

PDEx

Peso or PhP

Philippine Accounting Standards

Philippine Dealing and Exchange Corporation

Philippine peso, the lawful currency of the Republic of the
Philippines
14

PIFA

PSEi

Qualified Mutual Fund Sales Agent
or Sales Agent
Philippine Investment Funds Association

The Philippine Stock Exchange Composite Index

An individual, employed by a Distributor, who shall have
taken and passed the mutual fund sales agents licensing
examination given by the SEC

Redemption Price

The Funds prevailing NAV per Share computed as of end-
of-day on the date of sale of the Shares, less the applicable
Early Redemption Fee, if any

Registration Statement The registration statement filed by the Fund with the SEC in
compliance with the Securities Regulation Code and the
Investment Company Act

Regular Subscription Plan (RSP)

The automated periodic purchase (i.e., monthly, quarterly,
semi-annually, or annually) of the Funds shares in a pre-
determined fixed amount

Sales Load

The sales commission, if any, collected from the
subscribers of the Shares and paid to the Distributors or
their Qualified Mutual Fund Sales Agents

SEC The Securities and Exchange Commission of the Philippines

Securities Regulation Code Republic Act No. 8799

Servicing Agent A Qualified Mutual Fund Sales Agent of the Fund with whom
a Shareholder shall transact purchases and redemptions of
the Shares

Settlement Account A BPI or BFSB current account or savings account required
to be opened and maintained by each person or entity
transacting the Shares against which all payments for
Shares purchased shall be debited and into which all
proceeds of Shares sold shall be credited

Shareholder

An owner of shares in the ALFM Money Market Fund

Shares

The unclassified and voting common stock of the ALFM
Money Market Fund, issued out of the Funds authorized
capital stock or, when the context requires, the Funds
outstanding capital stock including the Offer Shares

15
T TE ER RM MS S A AN ND D C CO ON ND DI IT TI IO ON NS S O OF F T TH HE E O OF FF FE ER R

Eligible Investors The Shares of the Fund may be held by any person of legal age, or by a duly
authorized and existing corporation, partnership or other entity regardless of
nationality. However, because the Fund shall invest in shares of stock of
Philippine corporations, Philippine law limits foreign ownership of the Fund to a
maximum of forty percent (40%) of the Funds issued and outstanding capital
stock. The Fund, through the Stock Transfer Agent, has the right not to permit
nor allow the issuance or transfer of shares of the Fund which would reduce
the ownership by Philippine nationals of the Funds outstanding capital stock to
less than 60%.

Any applicant for subscription to the Offer Shares shall declare and warrant
that he/she is of legal age or, in the case of a corporate applicant, that there
are no legal restrictions prohibiting its acquisition of the Shares applied for and
that such applicant is otherwise eligible to remain a Shareholder of the Fund
throughout the duration of the period that he/she/it owns Shares of the Fund.

The Offer

The Fund is offering to the public its unclassified and voting common shares at
the Offer Price. The Shares shall be made available for sale until the earlier of:
(i) the date the Fund terminates the Offer, or (ii) the date when the number of
Shares subscribed and paid for has reached the Authorized Capital Stock
indicated below:

Name of Fund
Authorized
Capital Stock

The Offer Price

The Shares shall be offered at an Offer Price based on the Funds NAV per
Share computed as of end-of-day on the date the purchase order is made, plus
the applicable Sales Load, to a maximum percentage of 3%. Shares applied
for after the Cut-off Time shall be offered at an Offer Price based on the NAV
per Share calculated as of the next business day, plus the applicable Sales
Load, if any.

Cut-off Time

Minimum
Subscription

12:00 noon on a business day

A minimum subscription amount or worth of Shares shall be considered for
each new application. The Fund, subject to the approval of its Board of
Directors, may change such initial subscription amount and minimum additional
subscription amount, including that of the Regular Subscription Plan. Securities
sold shall be on cash basis. Installment sales are hereby expressly prohibited.
In a Regular Subscription Plan, the investor purchases shares in a periodic
frequency (i.e., monthly, quarterly, semi-annually, or annually) and at fixed
amount, the minimum of which is indicated below.

Name of Fund
Minimum Initial
Subscription
Amount
Minimum
Additional
Subscription
ALFM Money Market Fund PhP 5,000.00* PhP 1,000.00
*for Regular Subscription Plan (RSP), Php10,000.00 if without RSP*

Minimum
Maintaining
Balance

At any time, Shareholders should have holdings in the Fund worth at least:

Name of Fund
Minimum
Maintaining Balance
ALFM Money Market Fund PhP 5,000.00

16
Minimum Partial
Redemption
Redemptions by Shareholders from the Fund should be worth at least:

Name of Fund
Minimum
Partial Redemption
ALFM Money Market Fund PhP 1,000.00

Should a partial redemption result in the investment falling below the required
Minimum Maintaining Balance, the entire shareholdings of the Shareholder,
multiplied by the applicable NAV per Share as of the date of the partial
redemption, shall be paid to the said Shareholder via a credit to his/her/its
Settlement Account. Unless the Shareholder redeems before the specified
holding period of 30 days, there will be no redemption fee; otherwise, the Early
Redemption Fee of 1% will be applied.

Payment for the
Shares

Shares applied for shall be paid in full via a Debit Authority against the
applicants Settlement Account signed by the applicant on the date of
application. The Purchase Order should be received during the trading hours
of 9:00 a.m. to 12:00 noon; the applicants Settlement Account shall be
earmarked in real-time for the subscription amount and the actual debit shall be
done at end-of-day after the Offer Price for the day shall have been
determined.

Registration of
Investments

The registration of foreign investments in the Offer Shares with the proper
Philippine Government authorities or authorized agents shall be the
responsibility of the affected foreign investor.

17
C CO OM MP PA AN NY Y B BA AC CK KG GR RO OU UN ND D

The ALFM Money Market Fund, Inc. (ALFM Money Market or the Fund) is a domestic corporation
duly authorized to operate as an open-end investment company. The Fund was incorporated on
October 19, 2009 with an authorized capitalization of PhP 20.0 Million consisting of 2,000,000
common shares of par value PhP10.00 per share. The Fund is invested in a diversified portfolio of
short-term bonds and money market instruments. The following table provides information on the
history of the Funds authorized capital stock increases:

Increase
No.
Authorized Capital Stock Date of SEC Approval
1 5,000,000 shares November 18, 2010
2 10,000,000 shares November 17, 2011
3 20,000,000 shares November 12, 2012

The Fund has applied with the SEC for an increase in its Authorized Capital Stock from PhP 20.0
Million consisting of 2,000,000 common shares of par value PhP10.00 per share, to PhP 50.0 Million
consisting of 5,000,000 common shares of par value PhP10.00 per share. The application was
approved on November 18, 2010. The Fund applied for a second increase in its Authorized Capital
Stock from PhP 50.0 Million to PhP 100 Million, consisting of 10,000,000 common shares with a par
value of PhP 10.00. The Commission approved this increase on November 17, 2011. The Fund
applied for a third increase in its Authorized Capital Stock from PhP 100 Million to PhP 200 Million,
consisting of 20,000,000 common shares with a par value of PhP 10.00. The Comission approved this
increase on November 12, 2012.

The Fund has entered into a Management and Distribution Contract with BPI Investment
Management, Inc. authorizing BPI Investment to purchase and sell investment securities for the
account of the Fund. The Fund does not have employees of its own since the management and
administration functions are already being handled by BPI Investment. The Fund has adopted a
Manual of Corporate Governance and an Anti-Money Laundering Operating Manual. Quarterly
reporting of the Funds operations to the Board of Directors is being performed by BPI Investment to
properly identify, assess and manage risks that may arise any time during the Funds daily operations.
ALFM Money Market does not own any property such as real estate, plant and equipment, mines,
patents, etc. required to be disclosed under Annex C of SRC Rule 12.1.

ALFM Money Market is categorized as a money market fund. There are currently fifty-two (52)
investment companies in the Philippines, of which four (4) are money market funds. ALFM Money
Market competes directly with the other money market funds currently available in the market (i.e.
Sun Life Prosperity Money Market Fund, Inc. (18.48%), First Metro Save and Learn Money Market
(13.34%), and Philam Managed Income Fund, Inc. (2.04%)). With about PhP 1.050 Billion in Net
Asset Value as of December 31, 2012, ALFM Money Market stands as the largest money market
mutual fund in the country, accounting for 66.15% of the segment. The principal method of
competition in this industry is the NAV per share appreciation over time. The Fund will rely on the
active management of its appointed Fund Manager to provide investment returns that aim to
outperform all other money market funds in the segment, aided as well by the wide distribution
network of its appointed distributors and the reputation of the ALFM Mutual Funds brand.

REGULATORY SUPERVISION

Investment companies are regulated by the Securities and Exchange Commission and are registered
under the Investment Company Act of 1960 and the Securities Regulation Code (SRC) of 2000.
Prior to the SRC, investment companies were registered under the Revised Securities Act. Any
amendments to these or their implementing rules and other applicable laws may have effects on the
operations of investment companies. The proposed Collective Investment Schemes Law that will
replace the Investment Company Act is expected to be of tremendous benefit to the entire mutual
fund industry.

18
LEGAL PROCEEDINGS

The Fund, its Directors and Officers, have not been involved in any material legal proceeding since
the Funds incorporation.

19
D DE ES SC CR RI IP PT TI IO ON N O OF F C CA AP PI IT TA AL L S ST TO OC CK K

Capital Structure

The ALFM Money Market Funds authorized capital stock is shown in the table below:

Name of Fund

Number of
Authorized
Shares

Par Value
(in PhP)
Authorized
Capital Stock
(in PhP)
ALFM Money Market Fund 20,000,000 10.00 200,000,000

The Fund shall offer to the public common shares to be priced at the Net Asset Value per Share,
determined at end-of-day after the close of trading hours, plus any applicable sales load fee and other
incidental charges.

Rights and Privileges / Voting Rights

The Fund shall issue only one (1) class of common shares. The Shares have identical rights and
privileges, including voting rights. Each Share entitles the holder thereof to one vote at any meeting of
Shareholders of the Fund. Shareholders shall have cumulative voting rights for the election of the
Funds directors.

Preemptive Rights

The Corporation Code confers preemptive rights to shareholders of a Philippine corporation and
entitles them to subscribe to all issues or other dispositions of shares by the corporation in proportion
to their respective shareholdings, regardless of whether the shares proposed to be issued or
otherwise disposed of are identical in all respects to the shares held. However, a Philippine
corporation may provide for the exclusion of these preemptive rights in its Articles of Incorporation
and By-Laws.

The Funds Articles of Incorporation deny preemptive rights to the Shareholders. Therefore,
Shareholders of the Fund do not have the preemptive right to subscribe to any new issue of shares
nor the right to purchase any disposition by the Fund of any of its treasury shares. Furthermore, no
Shareholder shall have a preemptive 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, shares of
the Fund. Any part of such stock or other securities may at any time be issued, optioned for sale, and
sold or disposed of by the Fund pursuant to the resolution of its Board of Directors, to such persons
and upon such terms as may, to such Board, seem proper, without first offering such stock or
securities or any part thereof to existing Shareholders.

Appraisal Right

Under the Corporation Code, Shareholders who dissent from certain corporate actions (including the
merger or sale of all or substantially all of the assets of the Fund) may demand payment of the fair
market value (net asset value) of their Shares in certain circumstances.

Other than the foregoing, there are no other material rights for common shareholders of the Fund.

Dividends

The Corporation Code generally requires a Philippine corporation with surplus profits in excess of
100% of its paid-up capital to declare and distribute such surplus to its shareholders in the form of
dividends. Notwithstanding this general requirement, a Philippine corporation may retain all or any
20
portion of such surplus when (i) justified by definite expansion plans approved by its Board of
Directors; (ii) the required consent of any financing institution or creditor to such distribution is not
forthcoming; or (iii) it can be clearly shown that such retention is necessary under special
circumstances.

The Board of Directors of the Fund has adopted a policy, consistent with the Funds objective of
capital appreciation, to retain the surplus profits of the Fund in the retained earnings account. Such
accumulation is reflected in the computation of the net asset value per share. Shareholders realize
their gains when shares are redeemed. To date, there have been no distributions of dividends to
shareholders. The Board of Directors of the Fund may amend the dividend policy as conditions
warrant. In said event, the declaration of cash dividends is subject to the restriction that no dividends
will be declared that will impair the capital stock of the company.

Other Provisions

There are also no provisions in the Articles of Incorporation or By-Laws that would delay, deter or
prevent a change in control of the Fund.

MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED SHAREHOLDERS
MATTERS

Principal Market

The Shares of the ALFM Money Market Fund are available for purchase primarily by resident citizens
or investors of legal age, or by duly authorized and existing corporations, partnerships or other
entities, subject to existing Philippine laws, through licensed mutual fund sales agents of the Funds
Distributors. Investors who want an alternative to 30-day placements, and achieve an alternative
return, are the primary target market of the Fund. The Shares of the Fund are not traded publicly on
an exchange since the Fund stands ready to redeem or buy back the Shares from the Shareholders
any time.

Shares of the Fund may be purchased from the Distributors or their Sales Agents at an Offer Price
based on the Funds NAV per Share from 8:30 a.m. to 12:00 noon (Cut-off Time) of the date the
purchase order is made, plus the applicable sales load, if any. Shares applied for after the Cut-off
Time shall be offered at an Offer Price based on the NAV per Share calculated as of the next
business day, plus the applicable sales load, to a percentage up to a maximum of 3%.

Stated below are the NAV per Share of the Fund at the end of the quarter in 2010, 2011, and 2012.

ALFM Money Market Fund (PhP)
1Q 2Q 3Q 4Q
2010 100.41 100.95 101.82 103.02
2011 103.47 104.5 105.43 106.44
2012 106.97 107.82 108.96 109.65
2013 110.48 - - -

21
Stated below are the High and Low Net Asset Value Per Share (NAVPS) for the indicated quarters:

2010 2011 2012 2013
Jan-Mar high 03/31/10 100.41 03/28/2011 103.52 03/31/2012 106.97 3/18/2013 110.51
low 01/01/10 99.66 01/25/2011 102.75 01/01/2012 106.45 1/1/2013 109.66

Apr-Jun high 04/01/10 100.41 06/30/2011 104.5 06/29/2012 107.82 - -
low 06/30/10 100.95 04/01/2011 103.48 04/01/2012 106.97 - -

Jul-Sep high 07/01/10 100.95 09/30/2011 105.43 09/30/2012 108.96 - -
low 09/30/10 101.82 07/02/2011 104.27 07/09/2012 107.77 - -

Oct-Dec high 12/27/2010 103.05 12/04/2011 109.10 10/9/2012 108.83 - -
low 10/1/2010 101.83 12/24/2011 103.36 12/25/2012 109.77 - -

Number of Shareholders

The table below shows the Funds total number of shareholders as of April 30, 2013:

Name of Fund
Number of
Shareholders
ALFM Money Market Fund 1,207

Share Options and Treasury Shares

None of the Shares of the Fund are covered by options.

Issue of Shares

The Fund may issue additional Shares to any person, subject to the restrictions as may be stated in
their Articles of Incorporation and/or By-Laws, and for a consideration based on Net Asset Value per
Share.

Stock Certificates

In the interest of economy and convenience, definitive stock certificates representing the Funds
Shares shall not be issued unless requested by a Shareholder in writing addressed directly to the
Fund through the Funds Sales Agents. In lieu of stock certificates, the Fund shall issue to
Shareholders Depositary Receipts.

In case a stock certificate is issued, such certificate shall be returned to the Fund in the event of full or
partial redemption by the holder thereof. The stock certificate shall be cancelled and no new
certificate shall be issued until the cancelled certificate shall have been returned to its original place in
the stock certificate transfer book. The necessary expenses for each certificate of stock issued or
transferred shall be borne by the Shareholder who requested such issuance or transfer.

Share Register

The Funds official share register shall be maintained by the Corporate Secretary, through the Funds
Service Administrator, who shall likewise be principally responsible for the maintenance of the official
stock and transfer book of the Funds in coordination with the Stock Transfer Agent who, in turn, shall
22
be responsible for the issuance of stock certificates, as may be requested by Shareholders, and the
payment of dividends, if any.

Recent Sales of Unregistered or Exempt Securities Including Recent Issuances of Securities
Constituting an Exempt Transaction

Not applicable.

23
D DI IR RE EC CT TO OR RS S, , O OF FF FI IC CE ER RS S, , A AN ND D S SI IG GN NI IF FI IC CA AN NT T S SH HA AR RE EH HO OL LD DE ER RS S

The following, who are all Filipino citizens, are the Funds Directors and Officers as of the date of this
Prospectus:

1. Romeo L. Bernardo, Chairman / Independent Director

Mr. Bernardo, Filipino, born in 1954, 56 years old, has been the Chairman of the fund since
2007. He is currently the President of Lazaro Bernardo Tiu & Associates, Inc., a boutique
financial advisory firm, and serves as GlobalSource economist in the Philippines. He
organized LBT together with former Energy Secretary Delfin Lazaro and Atty. Helen Tiu. Mr.
Bernardo is a member of the Board of Directors of several companies and organizations
including Globe Telecom from 2001 to present; Bank of the Philippine Islands from 2002 to
present; RFM Corporation from 2003 to present; Philippine Investment Management
(PHINMA), Inc. from 2005 to present; Aboitiz Power, Inc. from 2008 to present; Philippine
Institute for Development Studies (PIDS) from 2005 to present; Ayala Life Assurance
Incorporated/Ayala Plans, Inc. from 2006 to present; and National Reinsurance Corporation of
the Philippines from 2006 to present. He is the Chairman of ALFM Peso Bond Fund, Inc. from
2003 to present, ALFM Dollar Bond Fund, Inc. from 2003 to present, ALFM Euro Bond Fund,
Inc. from 2005 to present, ALFM Growth Fund, Inc. from 2007 to present and Philippine Stock
Index Fund Corp. since 2007. Mr. Bernardo was an alternate director of the Asian
Development Bank from 1997 to 1998 and Undersecretary for International Finance,
Privatization & Treasury Operations of the Department of Finance of the Republic of the
Philippines from 1990 to 1996. Mr. Bernardo received a Bachelor of Science degree in
Business Economics (magna cum laude) from the University of the Philippines and a Masters
in Development Economics degree from Williams College.

2. Adelbert A. Legasto, President / Director Resigned as of Dec. 18, 2012

Mr. Legasto, Filipino, born in 1947, 64 years old, has been Director of the fund since 2007
and was elected President of the Fund in 2009. He used to be an Executive Vice President
and the Trust Officer of Bank of the Philippine Islands. Mr. Legasto graduated at the Ateneo
de Manila University with an A.B. Economics degree and completed his M.B.A. academics at
the Ateneo Graduate School of Business. He completed the Pension Funds & Money
Management course of the Wharton School, University of Pennsylvania, and Investment
Management at the CFA Institute at the Harvard Business School in Boston. He is also a
director of ALFM Peso Bond Fund, Inc. since 2001, ALFM Dollar Bond Fund, Inc. since 2005,
ALFM Euro Bond Fund, Inc. since 2005, ALFM Money Market Fund, Inc. since 2009, and
Philippine Stock Index Fund Corp. since 2003. He had previously served as Governor of the
Philippine Stock Exchange, Governor of the Makati Stock Exchange from 1993 to 1995, an
incorporator of the Philippine Central Depository (PCD) in the mid 90s and served as
President of the Trust Officers Association of the Philippines in 1998. He is also currently a
director of BPI Family Bank, Inc, Brightnote Asset Corp, Roxas Land Corp, and FEB Stock
Brokers, Inc.; and previously a director of BPI Investment Management Inc..

Mr. Legasto resigned as Director and President of the Fund due to retirement, as verbally
announced during the Board of Directors meeting on December 18, 2012.

3. Maria Theresa M. Javier, Vice Chairperson / Director

Ms. Javier, Filipino, born in 1970, 42 years old, serves as Senior Vice President and Group
Head of BPI Asset Management and Trust Group from 2009 to the present. She used to be
the President of the Fund Managers Association of the Philippines from 2008 to 2010, as well
as the Trust Officers Association of the Philippines from 2011 to 2012. She was an Alternate
Governor of the Market Governance Board of the Philippine Dealing and Exchange Corp. in
2010. She holds a B.S. Economics degree from University of the Philippines Los Baos and
earned a Masters degree in Economics from the University of the Philippines School of
24
Economics in Diliman. She completed the CFA Institute Investment Management Workshop
at Harvard Business School in 2006, as well as the Advanced Management Program also at
Harvard in 2010.

4. Sherisa P. Nuesa, President / Director

Ms. Nuesa, Filipino, born in 1954, 58 years old, is formerly a Managing Director of Ayala
Corporation. Currently, she is a Board member of the Blackhorse Emerging Enterprises Fund
(Singapore), Far Eastern University, and Psi Technologies, Inc. From 2009 to July 2010, she
was seconded to Integrated Micro-electronics, Inc. (IMI) as CFO and Senior Managing
Director, also concurrently Chief Administrative Officer. Previous to the IMI assignment, she
was the CFO of Manila Water Company for nine (9) years up to Dec. 2008, where she was
instrumental in the companys successful Initial Public Offering (IPO). In 2008, she was voted
ING-Finex (Financial Executives Institute of the Philippines) CFO of the Year. Her past
assignments in the Ayala Group include being a member of the Senior Management
Committee of Ayala Land up to 1999, where she was Head of the Commercial Centers Group
and previously the Group Comptroller. She also served as a Board member of various Ayala
Land subsidiaries. Ms. Nuesa has several successful IPOs to her credit, playing a lead role in
the IPOs of Ayala Land, Inc., Cebu Holdings, Inc., Cebu Property Ventures & Development
Corporation, Manila Water Company, as well as the PSE listing of IMI. Ms. Nuesa graduated
summa cum laude from the Far Eastern University (Institute of Accounts, Business and
Finance) in 1974. She holds a Master in Business Administration (MBA) degree from the
Ateneo-Regis Graduate School of Business. In 1991, she attended the Financial
Management Program for Executives, at Stanford University in California and in 1999, she
completed the 3-month Advanced Management Program of the Harvard Business School for
senior executives, in Boston, Massachusetts. She was installed in the Society of Fellows
(Professional Directorship Program) of the Institute of Corporate Directors, Philippines in
2011.

5. John Philip S. Orbeta, Independent Director
Mr. Orbeta, Filipino, born in 1961, 51 years old, is a Managing Director of Ayala Corporation
and the Head of its Corporate Services Group. He is also a member of its Senior
Management Committee. He founded HRMall, a subsidiary of Ayala Corp. and currently is its
President+ HR Mall is the Ayala Groups shared services center and is now a full fledged
business process outsourcing (BPO) company specializing in human resource services. He
also directs the Ayala Business Club and manages the Ayala Young Leaders Congress. Prior
to joining Ayala in 2005, Mr. Orbeta was a Vice President at Watson Wyatt & Company, a
NYSE-listed global consulting firm, and led its Human Capital Consulting Group which
supervised operations in the U.S. and Canada, the U.K. and Europe, Asia Pacific, and Latin
America. He transformed Watson Wyatt Philippines into one of its most successful country
offices during his nine (9) year tenure as Managing Director. He was also a Board member of
Watson Wyatt & Co. from 2000 to 2003. In 2008, Mr. Orbetas program Reinventing HR at
Ayala was awarded the People Program of the Year by the People Management Association
of the Philippines (PMAP). He received the Global HR Excellence Award for HR Leadership
in the Philippines from the World HR Congress. In 2009, he was awarded by PMAP as the
People Manager of the Year. Mr. Orbeta graduated from the Ateneo de Manila University in
1982 with an A.B. Economics degree. He accomplished the requirements of the American
Compensation Associations Certified Compensation Profession (CCP) Program in 1989+ He
completed the Watson Wyatt Leadership Development Program at Harvard Business School,
Boston, Massachusetts, in 1995.

6. Mario T. Miranda, Director
Mr. Miranda, Filipino, 54 years old, is currently the head of AMTGs Wealth Management
Team, overseeing customer relationship management (CRM) of all individual customers of
AMTG. His team is tasked with providing wealth management services to the various
segments of the banks consumer banking group. He is also a part time faculty Graduate
School, Mathematics Department of the Ateneo de Manila University. He earned his MBA
from the University of California and is a Registered Financial Consultant. He graduated from
25
Management Engineering, a premier 5 year honors course from the Ateneo de Manila
University.

Other Officers of the Fund

1. Fernando J. Sison III, Treasurer

Mr. Fernando J. Sison III, Filipino, born in 1952, 60 years old, is the Treasurer of the Fund
since 2009. He used to be the President of BPI Investment Management, Inc. from May 2004
to June 2012. He previously served as Vice President and head of many of BPI's divisions,
including AMTG Retail Trust Division, AMTG Portfolio Management Division, Securities
Distribution Groups Retail Funds Distribution, and Private Banking Unit. He was assigned in
BPI International Finance Ltd. (HK) as Head of Investment Management Division and in BPI
Capital Corporation Corporate Finance Group as Vice President and Head of Syndications
and Underwriting. He completed the corporate finance module of JP Morgan in New York
City and underwent on-the-job training in corporate finance with JP Morgan in Hongkong. He
previously served as President of the Investment Company Association of the Philippines
(ICAP) in 2003, 2004, and 2006 and currently serves as Chairman of the Board of the
Philippine Investment Funds Association (PIFA), formerly ICAP, from 2008 to 2012-2013. He
served as Industry Governor of the Market Governance Board of the Philippine Dealing and
Exchange Corp. in 2008 and 2011 and currently sits as Alternate Governor. He is a SEC-
licensed Certified Investment Solicitor from 2001 to 2012. Mr. Sison graduated from the
Ateneo de Manila University in 1974 with the degree A.B. General Studies (Honorable
Mention). He obtained his M.B.A. degree in 1976 from the University of the Philippines
(Diliman).

2. Atty. Maria Paz Garcia, Compliance Officer
Atty. Garcia, Filipino, born in 1966, 46 years old, graduated in 1987 from the UP School of
Economics Cum Laude. She graduated in 1991 from the Ateneo College of Law with a
degree of Juris Doctor and passed the Bar Exam in 1992. She has 19 years of legal, banking
and trust investment experience.

3. Atty. Sabino B. Padilla IV, Corporate Secretary

Atty. Sabino B. Padilla IV, Filipino, born in 1960, 50 years old, is the Corporate Secretary of
the Fund. Atty. Padilla graduated with a degree in Bachelor of Laws from the University of the
Philippines in 1985. He then received his Master of Laws from the Harvard University, USA in
1988. He is currently a partner of the Padilla Law Office which is legal counsel to various
religious orders, societies and congregations for men and women as well as educational
institutions and hospitals operated by them, and to BPI and its subsidiaries. Atty. Padilla is
also the Corporate Secretary of other mutual funds such as ALFM Peso, ALFM Euro, ALFM
Dollar, ALFM Growth, and Philippine Stock Index Fund.

Significant Employees

The ALFM Money Market Fund does not have employees of its own since the management of the
Fund is already being handled by its Fund Manager, BPI Investment Management, Inc. The Fund
(registrant) does not have a parent company.

Additional Information Required under Annex C of SRC Rule 12.1:

The incorporators of the Fund are: Mr. Romeo L. Bernardo, Mr. Adelbert A. Legasto, Mr.
Isagani G. de Castro, Mr. Ramon G. Madrid, and Mr. Emilio S. de Quiros, Jr.

26
Each Director shall serve for a term of one (1) year from his appointment and until his
successor has been duly elected and qualified, provided, however, that any Director may be
removed from office at any time with or without cause by a 3/4 vote of the subscribed capital
stock entitled to vote. Other than this, the Fund has no existing employment contract with any
of the Funds Directors.

Mr. Romeo L. Bernardo, Ms. Sherisa P. Nuesa, and Mr. John Philip S. Orbeta are the
Independent Directors of the Fund. An independent director is a person not having any
relationship or position in the Fund, or in parties related to the Fund, the holding of which
would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director, in compliance with Section 38 of the Securities Regulation Code.

Each Director and Officer is compensated an amount for every Board meeting attended, as
shown in the table below:

Director / Officer Position Year Salary Bonus Other
Salary
Romeo L. Bernardo Chairman
2010 34,000.00 - -
2011 46,750.00 - -
2012 29,750.00 - -
2013 (estimated) 60,000.00 - -
Adelbert A. Legasto
President
(Until December 2012)
2010 38,800.00 - -
2011 46,750.00 - -
2012 29,750.00 - -
2013 (estimated) - - -
Isagani G. De Castro
Independent Director
(Until April 20, 2012)
2010 34,000.00 - -
2011 46,750.00 - -
2012 17,000.00 - -
Emilio S. De Quiros
Jr.
Former Director
(Until November 2010)
2010 18,000.00 - -
Maria Theresa M.
Javier
Director
(Starting
November 2010)
2010 - - -
2011 - - -
2012 - - -
Ramon G. Madrid
(Until April 20, 2012)
2010 36,000.00 - -
2011 49,500.00 - -
2012 18,000.00 - -
Sherisa P. Nuesa
(Starting April 20, 2012)
2010 - - -
2011 - - -
2012 4,250.00 - -
2013 (estimated) 60,000.00 - -
John Philip S.
Orbeta
(Starting April 20, 2012)
2010 - - -
2011 - - -
2012 4,250.00 - -
2013 (estimated) 60,000.00 - -
Mario T. Miranda
Director
(Starting January 24,
2013)
2010 - - -
2011 - - -
2012 - - -
Atty. Sabino B.
Padilla IV
Corporate Secretary
2010 34,000.00 - -
2011 46,750.00 - -
2012 29,750.00 - -
2013 (estimated) 60,000.00 - -
Fernando J. Sison III Treasurer and OIC
2010 - - -
2011 - - -
2012 8,500.00 - -
2013 (estimated) 60,000.00 - -
Atty. Maria Paz A.
Garcia
Compliance Officer
2010 - - -
2011 - - -
2012 - - -

There are no other standard or consulting arrangements or any compensatory plan relating to
resignation / retirement by which Directors and Officers are to be compensated other than
that previously stated.

27
No current Director of the ALFM Money Market Fund, or employees of the Fund Manager, or
Investment Advisor, or any the Distributors, is related to each other up to the fourth civil
degree either by consanguinity or affinity. No Director of the ALFM Money Market Fund has
been the subject of any legal or criminal proceedings during the past five (5) years.

Corporate Governance

The Fund has adopted a Manual of Corporate Governance to institutionalize the principles of good
corporate governance in the entire organization. To measure or determine the level of compliance of
the Board of Directors and Officers with the Funds Manual of Corporate Governance, the Fund shall
establish a review or evaluation system. The company continuously evaluates the level of compliance
of the Board of Directors and top level management with its Manual on Corporate Governance
through a self-rating and peer evaluation system complemented by 180 degrees feedback
mechanism. To ensure that no deviation is committed from the companys manual and shall submit
the required Certification on the Funds Compliance with the Manual of Corporate Governance. There
has been no deviation from the Funds Manual of Corporate Governance as of the date of this
Prospectus. Other measures being undertaken by the Fund to fully comply with the adopted leading
practices on good corporate governance are: (i) strict compliance on the appointment of Independent
Directors; (ii) separation of the functions of the Chairman and the President; and (iii) the creation of an
Audit Committee chaired by an Independent Director.

Certain Relationships and Related Transactions

The Fund has no existing or proposed transaction with any entity which any of its Directors, Officers
or Shareholders have material interest in the last two (2) years and will not have any future related
transactions with such entities. The Fund has not hired an expert or independent counsel on a
contingent basis.

Voting Trust Holders of More Than 5%

There is no existing voting trust or similar agreement entered into by Shareholders owning more than
5% of the Shares.

Legal Proceedings

The Fund is not party to any material pending legal proceedings.

Involvement in Certain Legal Proceedings

During the last five (5) years and material to evaluation, none of the Directors or Officers of the Fund
were involved in any bankruptcy petition filed by or against any business of which any Director or
Officer was a General Partner or Executive Officer either at the time of the bankruptcy or within two
(2) years prior to that time; none were convicted by final judgment in a criminal proceeding, domestic
or foreign, excluding traffic violations and other minor offenses; none were subject to any Order,
judgment or decree not subsequently reversed, suspended or vacated, of any Court of competent
jurisdiction, domestic or foreign, permanently or temporarily enjoining, barring, suspending or
otherwise limiting their involvement in any type of business, securities, commodities, or banking
activities; and none were found by a domestic or foreign Court of competent jurisdiction (in a civil
action), the Commission or comparable foreign body, or a domestic or foreign Exchange or other
organized trading market or a self-regulatory organization, to have violated a securities or
commodities law or regulation and the judgment has not been reversed, suspended or vacated.

28
Changes in Control

There is no existing arrangement which is known to the Fund which may result in the change of
control in the Fund.

External Audit Fees

Audit and Audit Fees

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.

Isla Lipana & Co. is the appointed external auditor of the Funds statements of assets and liabilities
and the related statements of operations, changes in net assets attributable to shareholders, and
cash flows for the year then ending with the objective of expressing an opinion on them. The audit
shall made in accordance with the Philippine Standards on Auditing and accordingly includes such
tests of the accounting records and such other auditing procedures as they would consider
necessary. There are no other related services that the external auditor performed aside from the
services mentioned above and no other fees billed related to tax services.

Management is responsible for the preparation and the fair presentation of these financial statements
in accordance with Philippine Financial Reporting Standards. This responsibility includes: designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatements, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.

Audit Policies

The Audit Committee approves any engagement for the services of the external auditor. The final
draft of the Audited Financial Statement is presented to the Audit Committee, before the Boards final
approval and confirmation.

Audit fees paid for the years 2010, 2011, and 2012:

2012 2011 2010
Audit fees for the preparation of
the audited financial statement
PhP 283,472.00 PhP 277,760.00 PhP 240,800.00
Out-of-pocket expenses such as
report reproduction costs,
transportation, communication,
postage, meals and other
incidental expenses
- 10,120.32 9,307.20
TOTAL PhP 283,472.00 PhP 287,880.32 PhP 250,107.20

The fund engaged the external auditor to prepare the 2012 audited financial statements. No final
billing has been made for the year 2012 as of the date of filing. The estimated amount to be billed is
PhP 490,350.00.

* Date of Incorporation: October 2009

Changes in and Disagreements with Account on Accounting and Financial Disclosure
29

Isla Lipana & Co. was appointed as independent public accountant of the Fund with respect to its
operations for the year 2010. Ms. Blesida Pestao is the Partner assigned for the audit of the fiscal
year 2009. The Fund is compliant with SRC Rule 68 as amended, on the rotation of external auditor
or Partner every five (5) years. In taking this action, the members of the Board of Directors considered
carefully Isla Lipana & Co.s performance, its independence with respect to the services to be
performed, and its general reputation for adherence to professional auditing standards.

In the recent fiscal year external audit done by Isla Lipana & Co., there were no material
disagreements with regard to accounting procedures and financial disclosures.

30
P PR RI IN NC CI IP PA AL L P PA AR RT TI IE ES S

THE FUND MANAGER

BPI Investment Management, Inc. (BPI Investment), a wholly-owned subsidiary of the Bank of the
Philippine Islands, shall act as the Funds Investment Manager and, as such, is tasked to formulate
and implement the investment strategy of the Fund, and to provide and render management,
technical, and administrative services to the Fund. BPI Investment was incorporated as Ayala
Investment Management, Inc. on July 30, 1974 to principally engage in the business of managing an
investment company. On March 5, 1991, the SEC approved the change in corporate name to the
present name. BPI Investment is licensed by the SEC to act as Investment Company Adviser of
mutual funds. Its license as Investment Company Adviser was renewed on December 2011.

The Fund Manager does not have any existing arrangement with the Fund for the right to designate or
nominate the members of the Board of Directors.

BPI Investment is also the Principal Distributor of the Fund.

The members of the Board of Directors of BPI Investment as of the date of this Prospectus are as
follows:

1. Mercedita S. Nolledo, Chairman

Mrs. Nolledo, Filipino, born in 1941, 69 years old, Filipino, is a Senior Managing Director and
the Corporate Secretary of Ayala Corporation, General Counsel of the Ayala Group of
Companies, Executive Vice President and Corporate Secretary of Ayala Land, Inc., and
Director of the following companies: Bank of the Philippine Islands; BPI Family Savings Bank;
BPI Capital Corporation; Ayala Land, Inc.; Anvaya Cove, Inc.; Ayalafil, Inc.; Ayala Automotive
Holdings, Inc.; Honda Cars Makati, Inc.; and Isuzu Automotive Dealership, Inc. She
graduated with the degree of B.S. Business Administration, major in Accounting, at the
University of the Philippines in 1960 and topped the CPA exams (2nd place) given in the
same year. In 1965, she finished Bachelor of Laws from U.P. where she also topped the Bar
exams (2nd place) given in the same year.

2. Jose Mari L. Valmayor, Officer-in-Charge

Mr. Valmayor, Filipino, 45 years old, is the Officer-in-Charge of BPI Investment Management,
(BIMI) Inc. He oversees BIMIs business and operations and is concurrently head of its Fund
Management Unit. He joined the Bank of the Philippine Islands (BPI) on July 1997 and was a
graduate of the Bank Officers Development Program. He joined the Asset Management and
Trust Group in 1999 as Head of the Asset Allocation Unit and consequently moved to other
units within the Investments Division such as the Fixed Income Unit where he handled both
peso and dollar denominated Unit Investment Trust Funds. He was then assigned to BIMI
where he managed both the ALFM Dollar and ALFM Euro Bond Funds. Mr. Valmayor
obtained a B.S. Agriculture degree from the University of the Philippines at Los Baos
(UPLB) in 1989 and earned a Masters degree in Business Management from the Asian
Institute of Management in 1997.

3. Maria Theresa M. Javier, Director

(see previous reference on page 24)

4. Mario T. Miranda, Director

(see previous reference on page 25)

31
5. Aristn Estrada, Jr., Independent Director

Mr. Estrada, Filipino, born in 1940, 70 years old, served in various senior executive positions,
among which are the following: Senior Managing Director & Adviser to the Chairman of the
Board of Ayala Corporation (1994-2004); Managing Director, Mermac, Inc. (1994-2004); SVP
& Treasurer, Ayala Corporation (1983-91); Managing Director (Southeast Asia), Ayala
International (1982-83); President, Ayala Investment & Development Corporation (AIDC)
(1981-82); EVP, Bank of the Philippine Islands (BPI) (1979-80); SVP, BPI (1976-78); VP for
Trust & Investment Division, BPI (1974-75); VP for Investment Advisory Services, AIDC
(1970-74). Mr. Estrada was also a Director in over 40 corporations, notably, Ayala
Corporation (1983-2006); Bank of the Philippine Islands (1983-2002; 2004); Peoples Bank &
Trust Company (1971-74); Ayala Foundation, Inc.; Ayala International Finance Ltd. (Hong
Kong) (1981-83); AIDC (1981-83); Ayala Land, Inc.; Ayala Life Assurance, Inc.; BPI Family
Savings Bank; BPI International Finance Ltd. (Hong Kong); Eka Life Insurance Company
(Jakarta); FGU Insurance Corporation; Insular Life Assurance Company Ltd.; Integrated
Microelectronics, Inc.; Pure Foods Corporation; Sealion Holdings Limited (Singapore) (1982-
83); Universal Life & General Insurance (Malaysia) (1982-83); and Universal Reinsurance
Corporation. Mr. Estrada has undergone training in New York with First National City Bank of
New York (1966-68) and with Morgan Guaranty Trust Company of New York (1975-76). He
graduated at De La Salle University with the degrees of A.B. Humanities, summa cum laude,
in 1960; and B.S. Commerce (Accounting Major), summa cum laude, in 1962; He topped (1st
Place) the CPA Board Examinations in 1962.

6. Jesus V. Razon, Jr., Independent Director

Mr. Razon, Filipino, born in 1946, 64 years old, served as Senior Vice President of BPI and
Head of the Human Resources Group. He also served as Head of the Consumer Banking
Group Metro Manila Branches. He is currently a director of Premiere Bank. His past
directorships include BPI Operations Management Corp.; BPI Condominium Corp.; Ayala Life
Assurance, Inc.; FGU Insurance Corp.; BPI Forex Corp.; and BPI Family Savings Bank. Mr.
Razon graduated from the Ateneo de Manila University with an A.B. Economics degree and
earned his Master in Management degree from the Asian Institute of Management.

MANAGEMENT AND DISTRIBUTION CONTRACT

The Fund vests upon the Fund Manager the authority, without need of prior approval or prior
notification to the Fund, to purchase and sell securities and otherwise make or dispose of investments
for the account of the Fund, within the limits of the guidelines set by law, the regulations set by the
SEC, and the investment policies of the Fund.

The Fund Manager is further authorized to take charge of the collection of dividends, interests or
other payments due on all securities owned by the Fund and shall, on behalf of and for the benefit of
the Fund, exercise any and all rights of the Fund appurtenant to such securities such as the exercise
of any preemptive rights, redemption rights, options, and others. The Fund Manager shall use voting
rights for quorum purposes only. Nonetheless, in the event of unusual circumstances, the Fund
Manager may request the Fund in writing for permission to exercise voting rights for other specified
purposes.

For its services, the Fund Manager is entitled to charge a management and distribution fee based on
the Net Asset Value of the Fund, in such rates that will not exceed .375% p.a.

PLAN OF DISTRIBUTION

There are no Shares designated to be sold to specified persons. There is no plan to apply for listing
in any exchange the Shares of the registrants. Consequently, none of the registrant's Shares are to
be allocated to an exchange and/or to its members.

32
The Distributors of the Fund are BPI Capital Corporation; BPI Investment Management, Inc.; and BPI
Securities Corporation. All are distributors licensed by the Securities and Exchange Commission. The
date of the last renewal by the SEC of the distributor licenses of the named companies was
December 2012.

The Distributors shall be entitled to collect a Sales Load based on each amount invested by an
applicant or Shareholder in the Fund, in such percentages to a maximum 3%, and shall have the
discretion to establish the sharing of such Sales Load that is entitled to be received by its Sales
Agents.

THE INVESTMENT ADVISOR

BPI Asset Management & Trust Group shall act as the Funds Investment Advisor and is tasked to
render services which include investment research and advise; the preparation of economic, industry,
market, corporate, and security analyses; and assistance and recommendations in the formulation of
investment guidelines.

For its services, the Investment Advisor is entitled to charge an investment advisory fee in such rates
that will not exceed .375% p.a.

THE CUSTODIAN BANK

The Hongkong and Shanghai Banking Corporation Limited (HSBC) is the Funds Custodian Dank.
Under the Custodianship Agreement, HSBC shall be responsible for the safekeeping of appropriate
monies and securities of the Fund as Custodian. HSBC shall be entitled to collect a fee which shall
be negotiated between the Fund and HSBC.

THE RECEIVING BANKS

The Bank of the Philippine Islands and BPI Family Savings Bank shall serve as the Funds receiving
banks (the Receiving Banks). Payments for Shares purchased by applicants or existing
Shareholders shall be deposited by the Servicing Agents into the Funds settlement account
maintained with the Receiving Banks. The proceeds of Shares redeemed from Shareholders shall be
debited from the Funds settlement account maintained with the Receiving Banks. There is no
compensation for the receiving banks.

OTHER INFORMATION REQUIRED

The Fund has no independent counsel or expert hired on a contingent basis.

33
M ME EC CH HA AN NI IC CS S O OF F T TH HE E F FU UN ND D

The Funds Shares shall be offered through the accredited Distributors of the Fund. The Distributors
shall be entitled to collect a front-end Sales Load based on each amount invested by an applicant or
Shareholder in the Fund, in such percentages as are stipulated on page 5 of this Prospectus. The
Distributors shall have the discretion to establish the sharing of such Sales Load that their Sales
Agents are entitled to receive.

PURCHASE OF SHARES

Each new applicant shall fill out an Account Opening Form and Debit Authority / Subscription Order
which may be obtained from, or provided by, any accredited Distributor. Applicants undertake to sign
all documents and/or perform such acts as may be necessary to enable them to be registered as
holders of the Shares applied for and under their respective accepted Applications. In addition, if the
applicant is a corporation, partnership or trust, the Application must be accompanied by the following
documents: (1) a notarized certificate of the incumbent Corporate Secretary of the applicant, attesting
to: (i) the approval of the Board of Directors (or equivalent body) of the applicants subscription to the
Offer Shares, (ii) the authority of the signatories designated therein to sign the Application and
transact for and on behalf of the applicant, and (iii) the percentage of the applicants equity held by
Filipino citizens; and (2) a certified true copy of the SEC Certificate of Registration, the Articles of
Incorporation or other constitutive documents, and the By-Laws attached thereto. For subsequent
applications by a Shareholder, only a Debit Authority / Subscription Order need be signed.

The Debit Authority / Subscription Order shall indicate the gross amount of investment. The number
of Shares that an investor will be able to buy will be determined as and when the Funds NAVPS shall
have been computed and accordingly made available at the end of the day. The investors
Settlement Account will be automatically debited at the end of the day for the amount of whole shares
purchased, including the Sales Load, if any.

Subscription Orders received on or before 12:00 noon (the Cut-off Time) on any business day will be
processed at the NAVPS applicable on that day. Subscriptions Orders received after the Cut-off Time
shall be deemed to have been received on the next business day and will be processed at the
NAVPS applicable on the next business day.

REDEMPTION OF SHARES

The Fund agrees to purchase, and each Shareholder of the Fund shall be entitled to require the Fund
to purchase, but not in the event and to the extent that the Fund has no assets legally available for
such purpose whether arising out of capital, paid-in surplus or other surplus, net profits or otherwise,
all or any part of the Shares standing in the name of such Shareholder in the books of the Fund, but
only at the NAVPS as of the business day on which a Redemption Order is made on the Fund to
purchase such Shares.

The applicable NAVPS, less the Redemption Fee, if any, shall be called the Redemption Price. Any
such request for redemption shall be evidenced by a duly-signed Credit Authority / Redemption Order,
submitted to the Fund through the Sales Agent or such Shareholders assigned Servicing Agent or
Receiving Bank. Redemption Orders received on or before 12:00 noon (the Cut-off Time) on any
business day will be processed at the Redemption Price applicable on that day. Redemption Orders
received after the Cut-off Time shall be deemed to have been received on the next business day and
will be processed at the Redemption Price applicable on the next business day. The payment for
Shares so redeemed shall be credited to the Shareholders Settlement Account with the Receiving
Bank within the period stipulated by existing SEC rules, currently set at no longer than seven (7) days
reckoned from the date the Redemption Order is received by the Fund. The Fund shall be entitled to
collect an Early Redemption Fee based on the amount redeemed, in accordance with the following
schedule:

34
Name of Fund Holding Period Early Redemption Fee

30 days or less 1.00% flat
more than 30 days none

The Fund may suspend redemptions or postpone the date of payment for redemptions in cases when
(i) normal trading is suspended on the Philippine Stock Exchange, or (ii) the BSP suspends clearing
operations for the day, or (iii) with the consent of the SEC. The SEC may, whenever necessary or
appropriate in the interest of the Funds Shareholders, suspend the redemption of securities of open-
end companies.

SPECIAL CONSIDERATIONS

The Fund shall not suspend the right of redemption nor postpone the date of payment or satisfaction
upon redemption of any redeemable security for more than seven (7) banking days after the tender of
such security to the Fund, except in the following cases:

(1) for any period during which banks are closed other than customary weekend and holiday
closings;
(2) for any period during which an emergency exists as a result of which (a) disposal by the Funds of
securities owned by them are not reasonable practicable, or (b) it is not reasonably practicable for
the Fund to determine the value of its net assets; or
(3) for such other periods as the SEC may, by order, permit for the protection of security holders of
the Fund.

VALUATION AND ACCOUNTING PROCEDURES

The Funds investment securities shall be valued based on the valuation standards specified under
PAS Nos. 32 and 39. The NAV per Share (NAVPS) shall be obtained by dividing the market value of
the assets of the Fund, less the value of its liabilities, reserves for expenses and adjustments for
market risk, by the total number of Shares outstanding (which include deposits on subscriptions if the
Fund is applying for an increase in Authorized Capital Stock) at such valuation date. (See
Determination of the Funds Net Asset Value below.)

The Fund shall secure the services of an independent auditor to verify its financial statements at least
on an annual basis.

DETERMINATION OF THE FUNDS NET ASSET VALUE

The Net Asset Value per Share of the Fund, as of the close of any business day (the Close), shall
be the quotient obtained by dividing the value of the assets of the Fund, less the value of its liabilities,
reserves for expenses and adjustments for market risk, by the total number of Shares outstanding at
such Close (including deposits on subscriptions if the Fund is applying for an increase in Authorized
Capital Stock), all to be determined as follows:

1. The assets of the Fund shall be deemed to include:

(i) all cash on hand, on deposit, or on call; (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 dividends 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 interest accrued on any interest
bearing securities owned by the Fund; (vi) all real properties or interest therein; and (vii) all
other properties of every kind and nature including prepaid expenses.

35

2. 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 and custody expenses); (iii) all contractual obligations
for the payment of money or property; (iv) all reserves for expenses and adjustments for
market risk; and (v) all the other liabilities of the Fund of any kind and nature whatsoever,
except liabilities represented by the outstanding capital stock and surplus of the Fund.

3. For the purposes thereof:

(i) capital stock subscribed for shall be deemed to be outstanding as of the time of
acceptance of any subscription and the entry thereof in the books of the Fund, and the net
proceeds thereof shall be deemed to be an asset of the Fund; and (ii) capital stock
surrendered for purchase by the Fund pursuant to the provisions of its Articles of
Incorporation or By-Laws shall be deemed to be outstanding until the close of business on the
business day as of which such Net Asset Value is being determined and, thereupon and until
paid, the price thereof shall be deemed to be a liability of the Fund.

On a daily basis, the Fund Manager shall compute the NAV per Share and shall report the
same to the Funds Distributors. The Fund Manager shall cause the regular publication of the
Funds NAV per Share in two (2) newspapers of general circulation.

The Fund sets up a provision for market risk on its investment portfolio which is deducted from the
Funds net asset value to protect the Fund from market price fluctuations. To estimate its exposure to
market risk, the Fund Manager computes the statistical value at risk (VAR) of its investments. The
VAR measurement estimates the maximum loss due to adverse market movements that could be
incurred by the portfolio during a given holding period with a given level of confidence. The Fund
Manager uses a one month holding period, estimated as the number of days required to liquidate the
investment portfolio, and a 99% degree of confidence in the computation of VAR. As such, there
remains a 1% statistical probability that the portfolios actual loss could be greater than the VAR
estimate.

TAXATION

Investors are advised to consult their own professional advisers as to the tax implications of
subscribing for, purchasing, holding and redeeming shares of the Fund. Tax rulings and other
investment factors are subject to rapid change.

36
I IN NV VE ES ST TM ME EN NT T O OB BJ JE EC CT TI IV VE ES S A AN ND D R RE ES ST TR RI IC CT TI IO ON NS S O OF F T TH HE E F FU UN ND D

The primary investment objective of ALFM Money Market is to provide capital preservation and stable
income by investing in a diversified portfolio of short-term bonds and money market instruments, such
as Treasury Bills, Certificates of Deposit, Special Deposit Accounts of the BSP, and other government
and/or private fixed-income securities. In terms of rate of return, the objective of the Fund is to
exceed the HSBC Philippine Money Market Index.

ALFM Money Market may be considered as a conservative fund investing mainly in short-term fixed-
income securities.

CHANGE IN INVESTMENT OBJECTIVES

The investment objectives of the Fund may not be changed without the approval of the Shareholders
owning at least a majority of the respective Funds outstanding capital stock, present in person or by
proxy at a meeting called for such purpose.

INVESTMENT RESTRICTIONS

1. Until the Commission shall provide otherwise, the Fund shall not sell securities short nor
invest in any of the following:

* margin purchases of securities; investment in partly paid shares are excluded
* commodity futures contracts
precious metals
unlimited liability investments

2. The Fund shall not incur any further debt or borrowing unless at the time of its incurrence or
immediately thereafter there is an asset coverage of at least three hundred percent (300%)
for all borrowings of the Fund. Provided, however, that in the event that such asset coverage
shall at any time fall below three hundred percent (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 three hundred percent (300%).

3. The Fund shall not purchase from, or sell to, any of its officers or directors, or the officers or
directors of its Fund Manager, their managers or Distributors or firms of which any of them are
members, any security other than those of the Funds own capital stock.

4. The Fund shall not participate in an underwriting or selling group in connection with the public
distribution of securities, except for its own capital stock.

5. The total operating expenses of a Fund shall not exceed ten percent (10%) of its total
investment fund or total net worth as shown in the Funds audited financial statements.

INTERNAL LIMITATIONS

The Fund shall adhere to the following investment limitations which are fundamental policies which
may not be altered without the approval by Shareholders representing at least a majority of the Funds
outstanding capital stock at a meeting called for such purpose.

37
The Fund shall not:

* Buy or sell commodities
* Issue any guarantee
* Borrow money
* Issue senior securities
* Pledge its assets

ICA Rule 35-1 also provides that the maximum investment of an investment company in any single
enterprise shall not exceed an amount equivalent to ten percent (10%) of the investment companys
net asset value except obligations of the Philippine Government and its instrumentalities, nor shall the
total investment of the Fund exceed ten percent (10%) of the outstanding securities of any one
investee company.

For purposes of liquidity, at least ten percent (10%) of the Funds assets shall be invested in liquid or
semi-liquid assets, such as:

a. Treasury Notes or Bills, Certificates of Indebtedness issued by the BSP which are short-term
and other government securities or bonds and such other evidences of indebtedness or
obligations, the servicing and repayment of which are fully guaranteed by the Republic of the
Philippines; and

b. Savings or time deposits with government-owned banks or commercial banks, provided that
in no case shall any such savings or time deposit accounts be accepted or allowed under a
bearer or numbered account or other similar arrangement.

38
P PH HI IL LI IP PP PI IN NE E L LA AW WS S A AP PP PL LI IC CA AB BL LE E T TO O T TH HE E C CO OM MP PA AN NY Y

INVESTMENT COMPANY ACT OF 1960

The Investment Company Act of 1960 primarily regulates the business of investment companies.
Subject to the exceptions under the law, an investment company is any issuer, which is or holds
itself out as being engaged primarily, or proposes to engage primarily, in the business of
investing, re-investing, or trading in securities. An investment company is either (a) an open-end
company; or (b) a closed-end company. An open-end company is an investment company, which
is offering for sale or has outstanding, redeemable securities of which it is the issuer. A closed-
end company, on the other hand, is an investment company other than an open-end company.
The Investment Company Act provides for separates rules for each kind of investment company.

To be incorporated as an investment company, the following requirements should be complied with:

1. Minimum subscribed and paid-in capital of PhP 50.0 Million.

2. All shares of stock should be common and voting shares.

3. In the case of open-end companies, the Articles of Incorporation thereof should expressly
waive the preemptive rights of stockholders.

4. All Filipino membership in the Board of Directors.

The Investment Company Act requires the registration of the investment company under said Act.
The shares of the investment company are required to be registered under the Securities Regulation
Code. The Investment Company Act also requires an investment company to place and maintain its
securities and similar investments in the custody of a duly organized local commercial bank of good
repute, duly authorized by the BSP to perform trust functions.

DIVIDENDS

A corporation may declare dividends only out of its unrestricted retained earnings. These represent
the net accumulated earnings of the corporation, with its capital unimpaired, which are not
appropriated for any other purpose. The corporation may satisfy dividends in cash, by the distribution
of property, or by the issue of shares of stock. Dividends satisfied by the issuance of shares may be
paid only with the approval of shareholders representing at least two-thirds (2/3) of the outstanding
capital stock at a shareholders meeting called for such purpose.

The declaration of dividends is generally discretionary with the Board of Directors. However,
corporations with surplus profits in excess of 100% of their paid-up capital are required to declare and
distribute the amount of such profits and dividends, except when the retention is justified by definite
corporate expansion projects or programs approved by the Board of Directors, or when the consent of
creditors is required under any loan agreement or when it can be clearly shown that such retention is
necessary under special circumstances.

RIGHTS OF SHAREHOLDERS

The right of shareholders to institute proceedings on behalf of the corporation in a derivative suit is
recognized in Philippine jurisdiction. Derivative suits may be filed where the corporation itself is
unable or unwilling to institute the necessary proceedings to redress a wrong committed against the
corporation or to vindicate corporate rights. Derivative suits as a rule are filed with the SEC.
Jurisdiction over intra-corporate disputes is transferred to the regular Courts.

A shareholder has a right to dissent and demand payment of the fair value of his shares in the
following instances: any amendment of the Articles of Incorporation which has the effect of changing
or restricting rights attached to his shares, or of extending or shortening the term of corporate
39
existence, the sale/lease or other disposition of all or substantially all of the assets of the corporation,
or a merger or consolidation of the corporation with another corporation. The fair value at which the
shares of a dissenting shareholder may be sold to the corporation may be agreed upon by the parties.
If they cannot reach agreement, it shall be determined by an independent committee. Payment of the
shares of a dissenting shareholder may be made only if the corporation has unrestricted retained
earnings to purchase the shares.

MANAGEMENT

Corporate powers are exercised, and all business of a corporation is conducted, by the Board of
Directors. However, the powers of the Board of Directors are not unlimited. Certain corporate acts
may be effected only with the approval of shareholders representing at least two-thirds (2/3) of the
outstanding capital stock at a shareholders meeting convened for the purpose. Matters requiring
such shareholders approval include the amendment of the Articles of Incorporation, removal of
directors, the sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of
the assets of the corporation, and the investment of corporate funds in another corporation or
business or for any purpose other than the primary purpose for which the corporation was organized.

40
G GO OV VE ER RN NM ME EN NT T P PO OL LI IC CI IE ES S A AN ND D R RE EG GU UL LA AT TI IO ON NS S

The Fund falls under the category of Investment Company which is regulated by the Philippine
Government through the Securities and Exchange Commission and several laws. Investment
companies are required to be incorporated pursuant to the Corporation Code of the Philippines or
Batas Pambansa Blg. 68 (the Corporation Code). Aside from the incorporation requirements,
investment companies are required to be registered either as an open-end or a closed-end
investment company following the rules found under the Investment Company Act. Securities issued
by an investment company are required to be registered following the rules of the Securities
Regulation Code. The regulating body tasked with the implementation of the aforementioned laws is
the SEC.

THE SECURITIES AND EXCHANGE COMMISSION

Under the Securities Regulation Code, the SEC is responsible for regulating the securities market.
The SEC is a quasi-judicial government agency under the administrative supervision of the
Department of Finance.

The SEC is headed by a chairperson and four (4) associate commissioners who are appointed by the
President of the Philippines for a term of seven (7) years. The SEC is responsible for the registration
of securities proposed to be listed on the PSE, the registration of securities proposed to be offered to
the public, the regulation of the securities markets, the licensing of securities brokers and dealers, the
promulgation of rules and regulations on securities trading, and the issuance of opinions and rulings
pertaining to the proper application of the Corporation Code, the Securities Regulation Code, the
Investment Company Act, and certain other statutes.

The SECs departments that regulate investment companies are the Company Registration and
Monitoring Department, the Corporation Finance Department, and the Market Regulation Department.

THE INVESTMENT COMPANY ACT OF 1960

The Investment Company Act (Republic Act No. 2629) contains the various rules and regulations for
corporations which may wish to engage in the business of primarily investing, re-investing, or trading
in securities. The Act, however, excludes from its broad definition of investment companies such
entities as banks, insurance companies, employees stock bonus plans, pension plans, and profit-
sharing plans.

For purposes of the Act, investment companies are divided into open-end and closed-end companies,
defined as follows: (i) open-end company means an investment company which is offering for sale,
or has outstanding, any redeemable security of which it is the issuer; and (ii) closed-end company
means any investment company other than an open-end company.

The Act provides for several rules relative to the incorporation of investment companies, the most
basic of which are as follows: (i) the subscribed and paid-up capital of the investment company must
be at least PhP 50.0 Million; (ii) all shares of capital stock must be common and voting shares, and, in
the case of open-end companies, the Articles of Incorporation must waive the preemptive rights of
shareholders; and (iii) all members of the Board of Directors must be Filipino citizens.

THE SECURITIES REGULATION CODE

The Securities Regulation Code (Republic Act No. 8799) provides that securities which are to be
offered or sold to the public in the Philippines must first be registered with the SEC (except for certain
securities exempt from the registration requirements and securities to be sold in certain exempt
transactions). The Securities Regulation Code also requires companies listed in the stock exchange
and companies whose securities are registered under the said law to submit periodically corporate
information and financial statements.

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M MA AN NA AG GE EM ME EN NT T D DI IS SC CU US SS SI IO ON N O OR R A AN NA AL LY YS SI IS S O ON N P PL LA AN N O OF F O OP PE ER RA AT TI IO ON NS S

Adoption of PAS 32 and PAS 39

The Fund shall adopt Philippine Accounting Standards (PAS) No. 32 (Financial Instruments:
Presentation) and No. 39 (Financial Instruments: Recognition and Measurement) of the Philippine
Financial Reporting Standards (PFRS) which result in the classification of the Funds investment
securities to (i) financial assets at fair value through profit or loss, (ii) available-for-sale securities, (iii)
held-to-maturity securities, or (iv) loans and receivables.

In addition to this, based on managements assessment, the effectivity of Philippine Financial
Reporting Standards (PFRS) 9: Financial Instruments will NOT have any significant impact on the
Fund given the facts stated below:

a. The Fund does not carry any significant investment items left for re-classification from Available-
for-sale (AFS) to Fair Value Through Profit and Loss (FVTPL) security.
b. The Fund does not intend to classify any future acquisition of investment item as an AFS security.

As of March 31, 2013

The first quarter of 2013 proved to be a strong period for peso denominated
government securities, as yields decreased by an average of 84 basis points across the curve.
The decline in yields is attributed to manageable inflation, continued accommodative monetary
policy and prudent fiscal management. Inflation has avergaed 3.2% for in 2013, towards the
low-end of the governments target of 3-5%. Continued concerns over global growth coupled
with the relatively benign inflation has given the Monetary Board flexibility in maintaining its
policy rate at record low rates of 3.5% while adjusting the BSP special deposit facility to 2.5% a
decrease of more than 100bps. Fiscal restraint remains, with the two month deficit amounting
to only Php 31.2 billion.

ALFM Money Market Funds net asset value declined by 8.35% in the first quarter of
the year, compared to the decline of 13.5% for the industry on the back of investors
preference for higher yielding assets such as bond and equity funds.

As of March 31, 2013, 69.7% of the portfolio was invested in cash and money market
instruments, 14.2% in corporate notes and bonds, and 16.1% in government securities.
The funds duration was kept below its maximum of 1 at 0.61.

The net income of the fund significantly increased to P8.2 Mn as of March 2013 from
P1.7 Mn the same period a year ago. The increase was mainly brought about by positive
returns in both fair value gains and realized gains on its holdings. Total income improved to
P10.8 Mn compared to the prior years P3.5 Mn. Expenses, with the funds rapid growth,
increased to P2.1 Mn compared to P1.7 Mn a year ago.

We will maintain duration of less than 1 and will continue to diversify into corporate notes and
bonds for yield enhancement. We expect the fund price to remain resilient amidst possible
interest rate fluctuations in view of our active management strategy.

Top Five Key Performance Indicators

1. Performance vis--vis the Benchmark - ALFM Money Market Fund is an actively
managed money market fund whose objective is to seek capital preservation and
stable income from a diversified portfolio of short-term bonds and money market
instruments. The fund posted a year-to-date return of 0.75% for the period ending
March 31, 2013. The fund outperformed its benchmark HSBC Money Market Index by
27 bps.
42

2. Market Share in the Industry - The ALFM Money Market Fund dominated the Money
Market Mutual Fund industry with a market share of 62.4%, Sun Life Prosperity Money
Market Fund was a distant second at 19.6% of the industry.

3. NAV Growth vis--vis Industry Growth - The ALFM Money Market Funds net asset
value declined by 8.35% in the first quarter of the year, compared to the decline of
13.5% for the industry.

4. Portfolio Quality - The Funds portfolio should adhere to the investment
parameters indicated in the Funds prospectus at all times. As of March 31, 2013,
69.7% of the portfolio was invested in cash and money market instruments, 14.2% in
corporate notes and bonds, and 16.1% in government securities.

5. Performance vis--vis Competition - The funds performance is also compared
against the performance of other players in the market. As of March 31, 2013, ALFM
Money Market Fund ranked first against three other money market mutual fund
competitors in terms of year-to-date absolute return.

As of December 31, 2012

Global concerns centering on the Euro Zone and the United States continued to be in the
limelight, as unconventional central bank action was necessitated to support economic growth
and the continued smooth operation of financial markets.

The Philippines was not immune, as the monetary board deemed it fit to reduce policy rates
from 4.5% to a new record low of 3.5%. Policymakers likewise implemented a ban on non-
resident investors in the BSP Special Deposit Account (SDA) and a incremental decrease in
SDA yields. These actions brought down yields across the curve, but more significantly short
term yields decreased an average of 111 bps for the year.

Despite initial fears of rising crude oil prices, inflation was at the low end of government targets
averaging 3.1% versus the 3.0 - 5.0 target. Fiscal consolidation continued with an increase in
revenues of 12.7%, allowing the budget deficit to register below the government's target of
PHP279 billion. The support of Monetary policy and government spending the Philippine
economy registered a growth of 6.6%. These strong economic fundamentals garnered for the
Philippines one notch credit upgrades from not only Standard and Poor's (S&P) but also
Moody's investor service.

The fund was invested mostly in deposit instruments (81%), corporate notes and bonds (12%),
and government securities (7%). The funds duration was actively managed ending the year at
0.45.

The funds total assets grew to Php 1,050 Mn from 2011s Php 323 Mn. Correspondingly, total
comprehensive income increased to Php 28.11 Mn from 2011s Php 10.83 Mn. The main
driver was higher net gain on financial assets at fair value at Php 14.9 Mn from 2011s Php 2.9
Mn. The fund incurred expenses of Php 7.5 Mn, higher than the prior years Php 3.1 Mn.

We expect the Bangko Sentral ng Pilipinas to retain its accommodative monetary policy stance
as inflationary pressures remain manageable wane and concerns over global economic growth
to linger. Inflation will likely rise in 2013, though it will likely fall comfortably within the target of
3 5 %. Global growth concerns may continue to require central bank stimulus as Europe
continues to be in a recession and more of the periphery require aid. The US is likely to post
low growth and face fiscal constraints. Given the likelihood of a benign inflationary
environment, accommodative monetary stance and continued fiscal discipline, Philippine peso
denominated bonds may continue to be well supported.
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Top Performance Indicators

a) Performance vis--vis the Benchmark The ALFM Money Market Fund is an
actively managed money market fund whose objective is capital preservation and
stable income by investing in a diversified portfolio of Philippine Peso denominated
short-term fixed income and money market instruments. The Fund has to outperform
its benchmark consistently on a year-on-year basis. The Fund had a full year return of
3.01%, outperforming its benchmark by 0.87%. The funds 2 year cumulative return of
6.42% outperformed its benchmark by 2.68%.

b) Portfolio Quality The Funds portfolio should, at all times, adhere to the investment
parameters as indicated in the Funds prospectus. The Fund continued to remain well
diversified in 2012, with cash and receivables accounting for 81.1%, corporate notes
and bonds accounting for 12.3%, and government securities at 6.6%.

c) Market Share in the Industry The Fund is expected to continue to strengthen its
presence in the industry. ALFM Money Market fund ranked first in terms of market
share, garnering a 66.1% share of the sector, with Sun Life Prosperity Money Market
Fund a distant second at 18.5%.

d) NAV Growth vis--vis Industry Growth The money market mutual fund sector
composed of money market funds of Sun Life, First Metro, Philam and ATR KimEng,
posted a 35.0% growth in 2012. The net asset value of the sector increased to Php
411 Bn from Php 1,177 Mn. ALFM Money Market Funds NAV grew by 225.2% to Php
1,050 Mn in 2012 from Php 323 Mn the previous year.

e) Performance vis-a-vis Competition The Funds performance is also compared
against the performance of other players in the market. As of December 2012, ALFM
Money Market Fund was the best performing money market mutual fund.

As of DECEMBER 31, 2011

In 2011, the peso yield curve flattened as short term yields increased 15bps, while medium and long
term yields decreased 31bps and 99bps respectively. Market buying interest was evident in the
longer part of the curve as rates were more attractive, and FXTN auctions for the year garnered
strong participation.

The 2011 budget deficit came in at Php198 Billion (Bn), well below the Php300 Bn original
government target. Philippine inflation remained well anchored, averaging 4.8% for the year, which is
within the 3%-5% BSP target. Furthermore, market liquidity remained high with Php1.7 Tn in SDAs
and Php230 Bn in RRPs.

The international business community took notice of the countrys strong fundamentals as 2 credit
rating agencies upgraded their Philippine credit rating. Fitch and Moodys, upgraded the Philippines
credit rating to BB+ from BB, and to Ba2 from Ba3, respectively, while S&P raised the countrys
outlook to positive from stable.

The fund was invested mostly in deposit instruments (69%), corporate notes and bonds (20%), and
government securities (11%). The funds duration was actively managed during the year with a low of
0.6 and a high of 0.96. As of year-end, duration of the fund was at 0.75.

The funds total assets grew to Php 322.9 Mn from 2010s Php 280 Mn. Correspondingly, total
comprehensive income increased to Php 7.03 Mn from 2010s Php 6.32 Mn. The main driver was
higher net gain on financial assets at fair value at Php 2.95 Mn from 2010s Php 1.39 Mn. The fund
incurred expenses of Php 3.14 Mn, higher than the prior years Php 1.78 Mn. This however, was
muted by the Php 10.84 Mn increase in total income from 2010s Php 9.33 Mn.

44
For 2012, we expect downward pressure on interest rates given manageable inflationary outlook,
accommodative monetary policies and economic productivity concerns. We expect the BSP to cut
policy rates by at least 50bps in 2012. This will be supportive of domestic output stimulation and the
local bond market.

Risks that would impact domestic growth and investor sentiment include the escalation of the oil
dispute in Iran, a hard-landing for China, the increased sovereign debt and credit risk in Europe, and
the continued over-all slowdown in global growth.


a) Performance vis--vis the Benchmark The ALFM Money Market Fund had a full year return
of 3.32%, outperforming its benchmark 91-day Treasury Bills by 1.76%. The funds 2 year
cumulative return of 6.80% outperformed its benchmark 91-day Treasury Bills return by 1.97%.

b) Portfolio Quality The portfolio was diversified into holdings of cash & deposit instruments
(69%), corporate notes and bonds (20%), and government securities (11%).

c) Market Share in the Industry The ALFM Money Market fund placed second in terms of
market share, garnering a 25.7% share of the Php 1.15 Bn sector, behind Sun Lifes 45.6%.

d) NAV Growth vis--vis Industry Growth The money market mutual fund sector composed of
money market funds of Sun Life, First Metro, Philam and ATR KimEng, posted a 26.27% growth
in 2011. The net asset value of the sector increased to Php 1.15 Bn from Php 910 Mn. The ALFM
Money Market Funds NAV grew by 15.4% to Php 323 Mn in 2011 from Php 280 Mn the previous
year. The funds NAV growth ranked third among 5 competing mutual funds.

e) Performance vis-a-vis Competition The ALFM Money Market Fund was the best performing
money market mutual fund as of December 31, 2011, registering a full year return of 3.32%.
Based on data provided by the Philippine Investment Funds Association (PIFA), the fund's
competitors achieved lower returns in 2011, as follows:

Philam Managed Income Fund 1.07%
First Metro Save and Learn MM Fund - 1.59%
Sun Life Prosperity MM Fund - 0.37%
ATR KimEng MM Fund - 0.94%

As of DECEMBER 31, 2010

2010 was a good year for bonds given fiscal restraint, a benign inflationary environment, and high
market liquidity. For the year, short-tenor yields declined by an average of 270 bps and medium
tenors fell by an average of 148 bps. Controlled government spending brought the full year budget
deficit to PhP 314.5 Bn which is well within the target of PhP 325 Bn. Philippine inflation remained
well anchored, averaging 3.8% for the year, which is at the low end of the 3.5-5.5% BSP target, due
to controlled food and crude oil prices as well as the 5% peso appreciation. The market continued to
remain flush with liquidity as BSP SDAs and RRPs grew to PhP 1.48 Tn by December.

The fund was invested mostly in deposit instruments, corporate notes and short term government
securities. The funds duration was actively managed during the year with a low of 0.15 in January
and a high of 1.00 in July, ending the year with a duration of 0.89.

The funds total assets grew to PhP 279.7 Mn from 2009s PhP 49.6 Mn. Correspondingly, total
income increased to PhP 9 Mn from PhP 0.379 Mn. The main driver being increased interest income
of PhP 7.93 Mn versus 2009s PhP 0.444 Mn, and strong realized gains on sale of government
securities amounting to PhP 0.592 Mn versus 2009s PhP 0.085 Mn. Furthermore, unrealized gains
amounted to PhP 0.483 Mn versus a net unrealized loss of PhP 0.150 Mn in 2009 given the favorable
decline in peso interest rates. The fund incurred expenses of PhP 1.78 Mn, higher compared to 2009
given full year operation and increased fund value in 2010. Expenses consisted primarily of taxes,
45
licenses and management fees. Net income stood at PhP 6 Mn, versus the previous years PhP
0.682 Mn.

For 2011, we expect upward pressure on interest rates given increasing crude oil prices and
mounting inflationary pressures. Short term interest rates may remain relatively low given high market
liquidity and strong preference for short term tenors until rates adjust to expected monetary policy
tightening. With the expected increase in BSP policy rates and SDA rates, opportunities for attractive
investment outlets for the fund will remain. Even with the expectation of inflation exceeding the BSP
target of 3-5% and the slower GDP growth rate of 5-5.5%, positive prospects for 2011 remain,
including remittance-backed consumer spending, reduced political risk on the local front and high
optimism in the governments ability to improve its fiscal condition.


a) Performance vis--vis the Benchmark The ALFM Money Market Fund had a full year return
of 3.37%, outperforming its benchmark 91-day Treasury Bills, which had a return of 3.20%. Since
launch date of March 1, 2010, the fund returned 2.88%, outperforming 91-Day Treasury Bills,
which had a return of 2.53%.

b) Portfolio Quality With the growth in fund value, Tthe portfolio hadwas diversified into holdings
of cash & deposit instruments (40%), corporate notes (22%), short term (23%), and medium term
government securities (15%).

c) Market Share in the Industry The money market mutual fund sector, composed of money
market mutual funds of Sun Life, First Metro, Philam and ATR KiMEng, advanced 99.05% year-
on-year from Php457.18 Mn to Php910.03 Mn by December 2010. ALFM Money Market Funds
NAV comprised 30.75% of the Money Market Mutual Fund industry-the second largest fund in the
segment.

d) NAV Growth vis--vis Industry Growth The ALFM Money Market Fund's NAV far outpaced
the growth of the sector with its 461.65% year-on-year growth versus the 99.05% sector growth.
This pushed the fund to become the second largest player in the segment, from third largest in
2009.

e) Performance vis-a-vis Competition The ALFM Money Market Fund was the best performing
money market mutual fund as of December 31, 2010 registering a full year 2010 return of 3.37%.
Based on PIFA figures:

Philam Managed Income Fund - 2.01%
First Metro Save and Learn MM Fund - 1.69%
Sun Life Prosperity MM Fund - 0.78%
ATR KimEng MM Fund - 0.46%

Discussion and analysis of material event/s and uncertainties known to the management that
would address the past and would have an impact on future operations

Any known trends, demands, commitments, events or uncertainties that will have material
impact on the issuers liquidity:

Liquidity of the fund may be affected by the markets depth or the existence of readily available buyers
and sellers in the market.

Any events that will trigger direct or contingent financial obligation that is material to the
company, including any default or acceleration of an obligation:

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None

All material off-balance sheet transactions, arrangements, obligations (including contingent
obligations), and other relationships of the company with unconsolidated entities or other
persons created during the reporting period:

None

Any material commitments for capital expenditures, general purpose of such commitments,
expected sources of funds for such expenditures:

None

Any known trends, events or uncertainties that have had or that are reasonably expected to
have a material favorable or unfavorable impact on net sales/revenues/income from continuing
operations:

None

Any significant elements of income or loss that did not arise from the issuers continuing
operations:

The Fund Manager is not aware of any significant element of income or loss that did not arise from
the Funds continuing operations.

ALFM Money Market Fund

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