The First Philippine Fund Inc.

Capital Link Forum Closed End Country Funds and Global ETF Conference April 9, 2002 The Pierre Hotel, New York

Lilia Calderon Clemente

President & CEO, The First Philippine Fund Chairman, Clemente Capital, Inc.

Joaquin G. Hofilea
Portfolio Manager, Clemente Capital, Inc.

The First Philippine Fund Inc.

Launched in November 1989. The only closed-end Philippine fund listed on the New York Stock Exchange. Ticker symbol is FPF. Objective: long-term capital appreciation primarily through investments in equities securities of Philippine companies. Ability to buy A shares through local trustee. Ability to invest in pre-IPO, non-listed securities. Advisors: Clemente Capital, Philippine National Bank Current size is US$39 million.* Trading at a 10.8% discount to NAV.* * As of end-March 2002

4000

Philippine Stock Exchange Index: Nov 1989 - Mar 2002

FPF Launched Pow er surplus Major coup attem pt Peso devalued Typhoon Ruping Oil price and w age hikes Asian crisis Presidential elections Estrada inauguration May Elections GMA is new president Gulf War Pinatubo erupts US bases treaty rejected Tequila crisis Concerns on the property sector People Pow er 2

3500

3000

2500

2000

1500

Typhoon Angela

Insider trading scam Hostages, bom bings El Nino Estrada im peached Fed cuts rates WTC Attack

1000

Ram os inauguration Presidential elections Severe brow nouts

Inflation rises

500

Com parisons w ith Thailand

Earthquake

N-89 M-90 N-90 M-91 N-91 J-92 D-92 J-93 D-93 J-94 D-94 J-95 D-95 M-96 D-96 M-97 D-97 J-98 D-98 J-99 D-99 J-00 J-01 J-01 J-02

200

Performance Comparison: FPF NAV vs. Philippine Composite Index Inception to March 31, 2002

150

100

50

-50

-100 N-89 A-90 S-90 F-91 J-91 D-91 M-92 O-92 M-93 A-93 J-94 J-94 N-94 A-95 S-95 F-96 J-96 D-96 M-97 O-97 M-98 A-98 J-99 J-99 N-99 A-00 S-00 F-01 J-01 D-01

(FPF: Dividend adjusted; PSE-Composite: in US$)

THE FIRST PHILIPPINE FUND: NAV vs NYSE PRICE

30.00

25.00

20.00

15.00

10.00

5.00

FPF NAV NYSE PRICE

0.00 N-89 A-90 S-90 F-91 J-91 D-91 M-92 O-92 M-93 A-93 J-94 J-94 N-94 A-95 S-95 F-96 J-96 D-96 M-97 O-97 M-98 A-98 J-99 J-99 N-99 A-00 S-00 F-01 J-01 D-01

Fund Status as of March 31, 2002

As of 3/31/02 Total Assets NAV per share Share price Discount to NAV PERFORMANCE NAV Share Price Phisix (in US$) Peso Appreciation $ 39.0 mn $ 3.69 $ 3.29 10.84 % 1Q02 19.81 % 28.02 % 21.56 % 1.2 % As of 12/31/01 $ 33.2 mn $ 3.08 $ 2.57 16.56 % 4Q01 0.33 % -1.15 % 2.99 % -0.7 % Full Year 2001 - 29.20 % - 23.85 % - 24.42 % - 3.3 %

24% 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%

Fi na nc ial s ev s /B om er ty od lec op Fo Te Pr Co ng lo m er at es ies di a ilit Ut Me Co ns tru ct rv Mi Te ch io Se n ice ni no Po rt

Comparative Weightings: FPF vs. PSE as of December 31, 2001

FPF

s ng

PSE

lo

gy Ca sh

Top Holdings
as of December 31, 2000
Company San M iguel Corp. - A Phil Long Distance Telephone ADRs Ayala Corp. SM Prime Holdings Ayala Land Bank of the Phil. Islands M etro Bank & Trust Filinvest Land Inc. ABS-CBN PDRs La Tondea Distillers M anila Electric Co. A Jollibee Foods Percent of the Portfolio 12.49 11.78 9.16 8.84 7.51 5.62 5.25 3.91 3.66 3.21 2.99 2.77 % % % % % % % % % % % %

2002: Best Performing Markets YTD

Pakistan Stk Ind Jakarta Composite Russian Rts Index Korea Composite Korea Kospi 100 Philippine Composite Thai Stock Exchange Kosdaq Composite Hang Seng China Ent Mexico Bolsa 24.06% 23.50% 21.04% 19.14% 15.44% 33.69% 31.14% 30.10% 44.97% 40.87%

0%

10%

20%

30%

40%

50%

YTD up to April 5, 2002, in US$ Source: Bloomberg

Politics

Gloria Macapagal-Arroyos Leadership

Is firmly entrenched after May 2001 elections. Has formed a competent, wellrespected cabinet and earned confidence. Has stabilized the economy and positioned it for a turnaround: Better than expected 2001 GDP Capped the budget deficit within targets. Credit ratings upgraded Structural reforms enacted and implemented

The Abu Sayyaf Issue

Politics

Conflict is confined to a small island in Southern Philippines. Small band of bandits/rebels now only about 100 of Basilans 300,000 population. Muslims account for about 3 million of total 80 million population, which is predominantly Catholic. US military assistance and training as part of war exercises is welcomed. Government sees poverty alleviation as integral part of fight against terrorism.
Basilan

Economics

The Economy in 2001: Better than Expected

Official Targets 2000 GNP GDP By Production Agriculture Industry Services By Expenditure Exports Pvt Consumption Investments Govt Consumption 17.7 3.5 2.3 0.2 (3.2) 3.4 4.3 0.1 1.4 - 1.9 3.5 - 3.8 3.6 - 4.1 2.3 - 2.8 3.4 3.6 4.4 3.9 1.9 4.3 2.7 - 3.6 3.3 - 3.7 5.0 - 5.5 4.2 4.0 2001 3.7 3.4 2002 4.5 - 5.0 4.0 - 4.5

2001 growth surpassed analysts and governments estimates. Led by consumption, modest growth was achieved despite early skepticism and a volatile global economy. Structural reforms that enhanced productivity and competition supported the economy. These included: Modernizing agriculture and fisheries Liberalizing trade, telecom and utilities.

Economics

Monetary / Fiscal Policies Will Promote Growth

2002 2001 YTD 91-day T-bill (%) Exch Rate (Php) Inflation (%) GIR ($ bn) 9.8 51.0 6.1 15.7 2000 Budget Deficit: P bn Actual Program % of GDP 134.2 147.0 62.5 145.0 -4.1 -4.0 --130.0 -3.3 51.1 3.6 17.4 2001 Target -5-6 14.5 2002 5.5 10 - 11

Stability with the peso and inflation. Better inflation and GIR levels in 2002, as well as interest rates at a 15 year low, may cause a revision of official targets. Monetary policy will remain expansionary in 2002. Fiscal discipline was restored in 2001 vital for investor confidence. For 2002, a more relaxed budget and ample cash reserves will allow for early pump priming.

Economics

Growth Estimates Have Been Upgraded

2002 GDP Growth Rate Consensus

Source: Consensus Economics Inc.

Fundamentals

Comparative Asian Market Valuations

Mkt Cap US$ bn Philippines Indonesia Malaysia Singapore Thailand China Hong Kong Korea Taiwan 18 18 84 106 29 119 449 222 222 PE 2002E 14.9 8.4 17.3 21.2 17.9 13.8 15.0 11.9 23.1 Earnings Growth 2001E 91.7 29.4 13.0 -35.8 NM -3.3 -5.7 70.1 -54.1 2002E 31.4 28.9 9.9 15.9 30.2 3.6 9.5 11.4 69.4 PBV 2002E 1.0 2.4 1.7 1.5 1.7 1.7 1.5 1.4 2.2 EV/ EBITDA 12.7 16.1 12.7 11.9 13.8 7.7 12.0 6.8 14.9

Source: IBES, Morgan Stanley

Fundamentals

Earnings Upgrades
Philippines Equity Price and Earnings Consensus

Source: Bloomberg, IBES

Fundamentals

Investor Sentiment Picks Up

Credit rating agencies have upgraded their Philippine outlook. Both Moodys and S&P have now raised the Philippines to stable from negative. The Philippines has already launched two oversubscribed global bond issues in 2002. Investments registered with the BOI surpassed full year targets in 2001. Most were channeled into telecommunications and manufacturing. The Business Expectations Survey conducted by the Bangko Sentral in January shows an upbeat outlook for the next six months. Recent foreign investment announcements: Intel, UPS expand operations. Trading volumes in the stock market have improved. IPO activity is starting to revive. Stock exchange trading hours have been extended.

Reforms

Reform Momentum to be Sustained

Power bill implementing rules and regulations approved. Privatization of NPCs transmission and generation assets expected in 2H02. Special purpose vehicles/asset management companies to buy Philippine non-performing loans. Lehm+an Brothers, Goldman Sachs and Cerberus Capital to participate. Anti-money laundering measures being institutionalized. Improvements in tax collection and government procurement to increase efficiency and accountability. Capital market reforms market development with greater SEC oversight to promote transparency and corporate governance.

Conclusion

Country Balance Sheet

CURRENT ASSETS
Economic recovery on-track Beneficiary of global recovery Beneficiary of outsourcing trend Reform momentum picking up Stable inflation, peso & interest rates.

CURRENT LIABILITIES
Budget deficit but improving Peace and order issues e.g. terrorism Need for more developed capital markets and improvements in corporate governance. Need for greater job creation.

FIXED ASSETS
People labor pool, market. An open democracy. Strong financial system. An open investment environment. Strategic location; natural resources.

LONG-TERM LIABILITIES
High incidence of poverty. Low savings rate. Developing infrastructure. Vulnerable to natural calamities, weather patterns.

NET WORTH: The Philippines has begun to put its house in order.

Conclusion

Why Invest in FPF now

FPF is poised to capture the Philippines recovery and growth. Long-term outperformance. Long-term professional management in place. Good risk control less volatile and more diversified than the Philippine market. Attractive valuations of FPF, given current price and discount. FPF is the only Philippine country fund listed in major exchanges.