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The prospectus is being displayed in the website to make the prospectus accessible to more

investors. The Philippine Stock Exchange (PSE) assumes no responsibility for the correctness of any of the statements made or the opinions or reports expressed in the prospectus. Furthermore, the

PSE makes no representation as to the completeness of the prospectus and disclaims any liability

whatsoever for any loss arising from or in reliance in whole or in part on the contents of the

prospectus.

The offering information on this Web site is intended to be available only to Philippine and

non-Philippine citizens residing in the Philippines or corporations or judicial entities organized and

existing under Philippine law, and is not intended for distribution in the United States or to U.S.

persons (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended

(the "U.S. Securities Act")). The information contained in this Web site may not be published or

distributed, directly or indirectly, into the United States and this information (including the

preliminary and final Prospectus) and does not constitute an offer of Offer Shares for sale in theUnited States or to, or for the account or benefit of, U.S. persons. The Offer Shares described in the

Prospectus have not been, and will not be, registered under U.S. Securities Act or with any

securities regulatory authority of any state or other jurisdiction in the United States and may not be

offered or sold, directly or indirectly, into the United States or to, or for the account or benefit of,

U.S. persons unless the Offer Shares are so registered or an exemption from the registration

requirements is available. There will be no public offer of the Offer Shares mentioned herein in the

United States.

THIS PROSPECTUS IS TO BE USED EXCLUSIVELY FOR THE DOMESTIC OFFER AND IS

NOT INTENDED TO BE VIEWED BY NON-PHILIPPINE RESIDENTS.


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Prospectus January 19, 2008

Pepsi-Cola Products Philippines, Inc.(incorporated with limited liability in the Republic of the Philippines)

Primary and Secondary Offer of 1,142,348,680 Common Shares

Offer Price of P=3.50 per Offer Share

to be listed and traded on the First Board of the Philippine Stock Exchange, Inc.

Sole Global Coordinator, Bookrunner and International Underwriter

UBS Investment Bank

Joint Domestic Lead Underwriters

ATR KimEng Capital Partners, Inc. BDO Capital & Investment Corporation

Domestic Participating Underwriters

ING Bank N.V., Manila BranchAB Capital and Investment Corporation RCBC Capital CorporationMultinational Investment Bancorporation Unicapital, Inc.


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PEPSI-COLA PRODUCTS PHILIPPINES, INC.

KM. 29 NATIONAL ROAD, TUNASAN

MUNTINLUPA CITY

PHILIPPINES 1773

TELEPHONE NUMBER: (632) 850 7901

This Prospectus relates to the offer and sale of 1,142,348,680 common shares (the “Firm Offer,” and such shares,

the “Firm Shares”), par value of P=0.15 per share (the “Shares”), of Pepsi-Cola Products Philippines, Inc., a

corporation organized under Philippine law. The Firm Shares will comprise (i) 380,782,893 new Shares to be

issued and offered by us by way of a primary offer (the “Primary Offer,” and such Shares, the “Primary Offer

Shares”) as further described below and (ii) 761,565,787 existing Shares offered by Guoco Assets (Philippines),

Inc. and The Nassim Fund (the “Selling Shareholders”) pursuant to a secondary offer (the “Secondary Offer”),

and such Shares, the “Secondary Offer Shares”). The Nassim Fund has granted UBS AG, acting through its

business group, UBS Investment Bank, in its role as stabilizing agent (the “Stabilizing Agent”), an option

exercisable in whole or in part from and including the date of listing and when trading of the Firm Shares

commences (the “Listing Date”) on the Philippine Stock Exchange (the “PSE”) and ending on the date 30 days

from the date of this Prospectus, to purchase up to an additional 171,352,302 Shares at the Offer Price (the“Optional Shares,” and together with the Firm Shares, the “Offer Shares”), on the same terms and conditions

as the Firm Shares as set forth in this Prospectus, solely to cover over-allotments, if any (the “Over-Allotment

Option”). The offer of the Offer Shares, including the Optional Shares, is referred to as the “Offer.” The Optional

Shares will be sold as part of the International Offer (as defined below). See “Plan of Distribution.”

The Offer Shares shall be offered at a price of P=3.50 per Offer Share (the “Offer Price”). The determination of

the Offer Price is further discussed on page 31 of this Prospectus. An estimated total of 3,693,772,279 Shares will

be outstanding after the Offer. The total proceeds to be raised by us and the Selling Shareholders from the sale

of Firm Shares will be P=3,998,220,380. We will not receive any proceeds from Shares sold on the exercise of the

Over-Allotment Option.

Our estimated net proceeds from the Primary Offer, after deducting estimated underwriting discounts,commissions and estimated offering expenses payable by us, will be approximately P=1,196 million. For a more

detailed discussion on the proceeds from the Firm Offer and our proposed use of proceeds, please see “Use of

Proceeds” on page 27 of this Prospectus.

Each holder of Shares will be entitled to such dividends as may be declared by our Board of Directors (the

“Board”), provided that any stock dividends declaration requires the approval of shareholders holding at least

two-thirds of our total outstanding capital stock. The Corporation Code of the Philippines, Batas Pambansa Blg.

68 (the “Philippine Corporation Code”) has defined “outstanding capital stock” as the total shares of stock

issued, whether paid in full or not, except for treasury shares. Dividends may be declared only from our

unrestricted retained earnings. See “Dividends and Dividend Policy” on page 29 of this Prospectus.

342,704,000 of the Offer Shares (the “Domestic Offer Shares”) are being offered and sold by us and Guoco

Assets (Philippines), Inc. at the Offer Price in the Philippines (the “Domestic Offer”). 228,361,000 of the

Domestic Offer Shares are being offered to all of the trading participants of the PSE (the “PSE Brokers”) and up

to 114,343,000 of Domestic Offer Shares are being offered to local small investors (“Local Small Investors”) in

the Philippines. ATR KimEng Capital Partners, Inc. (“ATR KimEng”) and BDO Capital & Investment

Corporation (“BDO Capital” and together with ATR KimEng, the “Joint Domestic Lead Underwriters”) will act

as the Joint Domestic Lead Underwriters of the Domestic Offer. Details regarding the commission to be received

by the Joint Domestic Lead Underwriters can be found under “Plan of Distribution” on page 132 of this

Prospectus. Prior to the closing of the Domestic Offer, any allocation of Domestic Offer Shares not taken up by

the PSE Brokers and Local Small Investors shall be distributed by the Domestic Underwriters to their respective

clients or the general public. Domestic Offer Shares not taken up by the PSE Brokers, the Local Small Investors

and the Joint Domestic Lead Underwriters’ clients or the general public shall be purchased by the Joint DomesticLead Underwriters.

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This Prospectus includes forward-looking statements. We have based these forward-looking statements largelyon our current expectations and projections about future events and financial trends affecting our business.Words including, but not limited to, “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,”“intends,” “expects” and similar words are intended to identify forward-looking statements. In light of theserisks and uncertainties associated with forward-looking statements, investors should be aware that the

forward-looking events and circumstances discussed in this Prospectus might not occur. Our actual results coulddiffer substantially from those anticipated in our forward-looking statements.

No representation or warranty, express or implied, is made by the International Underwriter or the JointDomestic Lead Underwriters as to the accuracy or completeness of the information herein and nothing containedin this Prospectus is, or shall be relied upon as, a promise or representation by the International Underwriter orthe Joint Domestic Lead Underwriters. Any reproduction or distribution of this Prospectus, in whole or in part,and any disclosure of its contents or use of any information herein for any purpose other than considering aninvestment in the Offer Shares is prohibited. Each offeree of the Offer Shares, by accepting delivery of thisProspectus, agrees to the foregoing.

No person has been or is authorized to give any information or to make any representation concerning us or ouraffiliates, the Selling Shareholders or the Offer Shares, which is not contained in this Prospectus and anyinformation or representation not so contained herein must not be relied upon as having been authorized by us,the Selling Shareholders, the International Underwriter or the Joint Domestic Lead Underwriters. Neither thedelivery of this Prospectus nor any offer, sale or delivery made in connection with the Offer shall at any time orin any circumstances imply that the information contained herein is correct as at any time subsequent to its dateor constitute a representation that there has been no change or development reasonably likely to involve amaterial adverse change in our affairs since the date hereof.

Market data and certain industry forecasts used throughout this Prospectus were obtained from internal surveys,market research, publicly available information and industry publications. Certain information with respect tomarket share is based in part on data reported by AC Neilsen through its Retail Index Service for the period toSeptember 2007. AC Neilsen holds the copyright for such data. Industry publications generally state that theinformation contained therein has been obtained from sources believed to be reliable, but that the accuracy and

completeness of such information is not guaranteed. Similarly, internal surveys, industry forecasts and marketresearch, while believed to be reliable, have not been independently verified, and neither us, the SellingShareholders nor the Underwriters make any representation as to the accuracy of such information.

In connection with the Offer, the Stabilizing Agent may effect price stabilization transactions for a periodbeginning on or after the Listing Date but extending no later than 30 days from the date of this Prospectus. TheStabilizing Agent may purchase Shares in the open market only if the market price of the Shares is below the OfferPrice. This may have the effect of preventing a decline in the market price of the Shares and may also cause theprice of the Shares to be higher than the price that otherwise would exist in the open market in the absence of these transactions. If the Stabilizing Agent commences any of these transactions, it may discontinue them at anytime. The Stabilizing Agent is required to disclose to the Philippine SEC any of the foregoing price stabilizationtransactions.

CONVENTIONS APPLYING TO THIS PROSPECTUS

In this Prospectus, the terms “we,” “our,” “us,” “the Company” and “PCPPI” refer to Pepsi-Cola ProductsPhilippines, Inc.

In this Prospectus, unless otherwise specified or the context otherwise requires, all references to the “Philippines”are references to the Republic of the Philippines. All references to the “Government” herein are references to theGovernment of the Republic of the Philippines. All references to the “BSP” are references to Bangko Sentral ngPilipinas, the central bank of the Philippines. All references to “United States” or “U.S.” herein are to the UnitedStates of America. All references to “peso” and “P=” herein are to the lawful currency of the Philippines and allreferences to “U.S. dollar” or “U.S.$” herein are to the lawful currency of the United States.

For convenience, certain peso amounts have been translated into U.S. dollar amounts, based on the exchange rateon September 28, 2007 of P=45.063 = U.S.$1.00, being the weighted average rate for that date for the purchaseof U.S. dollars with pesos under the Philippine Dealing System (the “PDS”) and published in the Reference

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Exchange Rate Bulletin by the BSP (the “BSP Rate”). Such translations should not be construed as

representations that the peso or U.S. dollar amounts referred to could have been, or could be, converted into

pesos or U.S. dollars, as the case may be, at that or any other rate or at all. For further information regarding

rates of exchange between the peso and the U.S. dollar, see “Exchange Rates.” Figures in this Prospectus have

been subject to rounding adjustments. Accordingly, figures shown for the same item of information may vary and

figures which are totals may not be an arithmetic aggregate of their components. On January 18, 2008, the BSPRate was P=40.959 = U.S.$1.00.

PRESENTATION OF FINANCIAL INFORMATION

Unless otherwise stated, all financial information relating to us and our subsidiaries contained herein is stated in

accordance with Philippine Financial Reporting Standards (“PFRS”).

In this Prospectus, references to “fiscal 2005,” “fiscal 2006” and “fiscal 2007” refer to the fiscal years ended June

30, 2005, June 30, 2006 and June 30, 2007, respectively. Manabat Sanagustin & Co. ( “MS & Co.”), a member

practice of KPMG, has audited and rendered an unqualified audit report on our consolidated financial statements

for fiscal 2005 and fiscal 2006 and our financial statements for fiscal 2007. MS & Co. has also audited andrendered an unqualified audit report on our interim financial statements for the three-month periods ended

September 30, 2006 and 2007.

Unless otherwise indicated, the description of our business activities in this Prospectus is presented on a

consolidated basis. For further information on our corporate structure, see “Business — Overview.”

In this Prospectus, references to “EBITDA” are to net income after adding income tax expense, depreciation and

amortization and interest expense, references to “EBITDA Margin” are to EBITDA divided by net sales and

references to “EBIT” represent net income after adding income tax expense and interest expense. EBITDA,

EBITDA Margin and EBIT are not measures of performance under PFRS, and investors should not consider

EBITDA, EBITDA Margin or EBIT in isolation or as alternatives to net income as an indicator of our operating

performance or to cash flow from operating, investing and financing activities as a measure of liquidity, or anyother measures of performance under PFRS. Because there are various EBITDA, EBITDA Margin and EBIT

calculation methods, our presentation of these measures may not be comparable to similarly titled measures used

by other companies.

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TABLE OF CONTENTS

Page

Glossary of Terms . . . . . . . . . . . . . . . . . . . 1

Summary . . . . . . . . . . . . . . . . . . . . . . . . . 4Summary of the Offer . . . . . . . . . . . . . . . . 7

Summary Financial Information . . . . . . . . . 13

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . 16

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 27

Dividends and Dividend Policy . . . . . . . . . . 29

Exchange Rates . . . . . . . . . . . . . . . . . . . . . 30

Determination of Offer Price . . . . . . . . . . . 31

Capitalization . . . . . . . . . . . . . . . . . . . . . . 32

Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Selected Financial Information . . . . . . . . . . 34

Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . 37

Business . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Industry . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Page

Regulation . . . . . . . . . . . . . . . . . . . . . . . . 84

Board of Directors and Senior Management . 89

Related Party Transactions . . . . . . . . . . . . . 96

Principal and Selling Shareholders . . . . . . . . 101

Description of Share Capital . . . . . . . . . . . . 104

Description of Properties . . . . . . . . . . . . . . 113

Material Contracts . . . . . . . . . . . . . . . . . . 115

The Philippine Stock Market . . . . . . . . . . . 122

Philippine Foreign Exchange and ForeignOwnership Controls . . . . . . . . . . . . . . . . 126

Philippine Taxation . . . . . . . . . . . . . . . . . . 128

Plan of Distribution . . . . . . . . . . . . . . . . . . 132

Legal Matters . . . . . . . . . . . . . . . . . . . . . . 135

Independent Public Accountants . . . . . . . . . 136

Financial Statements and Independent

Auditor’s Reports . . . . . . . . . . . . . . . . . . F-1

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In this Prospectus, unless the context otherwise requires, the following terms shall have the meanings set out

below.

Application ........................................ An application to subscribe for Offer Shares pursuant to the Firm Offer

ATR KimEng ..................................... ATR KimEng Capital Partners, Inc.

Banking Day ...................................... A day other than a Saturday or Sunday on which banks are open forbusiness in Metro Manila

BDO Capital ...................................... BDO Capital & Investment Corporation

BIR ..................................................... Bureau of Internal Revenue

Board ................................................. Our Board of Directors

BSP ..................................................... Bangko Sentral ng Pilipinas, the central bank of the Philippines

BSP Rate ............................................ The weighted average rate for a specific date for the purchase of U.S.

dollars with pesos

Company or PCPPI ........................... Pepsi-Cola Products Philippines, Inc.

Crossing Date .................................... The date when the sale of the Secondary Offer Shares by the SellingShareholders to investors shall be crossed through the facilities of thePSE

Domestic Offer .................................. 342,704,000 Offer Shares to be offered by us and Guoco Assets(Philippines), Inc. to the public in the Philippines

Domestic Offer Period ....................... From 9:00 a.m., Manila time, on January 21, 2008 to 11:00 a.m.,Manila time, on January 28, 2008, or such other period as may beagreed between us and the Joint Domestic Lead Underwriters, subjectto approval by the Philippine SEC and the PSE

Domestic Offer Shares ....................... The Offer Shares that are being offered by us and Guoco Assets(Philippines), Inc. in the Philippines relating to the Domestic Offer

Domestic Participating Underwriters ING Bank N.V., Manila Branch, AB Capital and InvestmentCorporation, RCBC Capital Corporation, Multinational InvestmentBancorporation and Unicapital, Inc.

Domestic Receiving Agent ................. Stock Transfer Service, Inc.

Domestic Receiving Bank ................... Citibank N.A.

Domestic Selling Agent ...................... Trading Participants of the PSE

Domestic Underwriters ...................... The Joint Domestic Lead Underwriters and the Domestic Participating

UnderwritersDomestic Underwriting Agreement ... Agreement to be dated on or about January 21, 2008 among us, Guoco

Assets (Philippines), Inc. and the Domestic Underwriters

Eight-ounce case equivalents .............. A standardized measure of beverage volume, being the volumecontained in a case of 24 eight-ounce bottles (approximately 5.7 liters)

Firm Offer ......................................... The offer and sale of 1,142,348,680 Shares by us and the SellingShareholders

Firm Shares ........................................ The Shares relating to the Firm Offer

First Board ......................................... The First Board of the Philippine Stock Exchange

First Closing Date .............................. Date of delivery of the Firm Shares, which is expected to occur in

Manila on or about February 1, 2008, or such other date as theUnderwriters and we shall agree in writing

FRSC ................................................. The Philippine Financial Reporting Standards Council

Glossary of Terms

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GDP .................................................... The Gross Domestic Product of the Philippines, which is a measure of economic activity compiled by the Philippines National StatisticalCoordination Board

Government ....................................... The Government of the Republic of the Philippines

Guoco Group .................................... Guoco Group Limited and its subsidiaries, including our shareholdersGuoco Assets (Philippines), Inc. and Hong Way Holdings, Inc.

International Offer ............................. 799,644,680 Offer Shares that are being offered by us and the SellingShareholders and sold outside the Philippines and the United States to:(i) non-U.S. persons in reliance on Regulation S under the U.S.Securities Act; and (ii) in the United States to QIBs in reliance on Rule144A under the U.S. Securities Act. For the avoidance of doubt, theOptional Shares will be offered as part of the International Offer

International Offer Shares ................. The Shares that are being offered by us and the Selling Shareholdersrelating to the International Offer

International Underwriter .................. UBS AG, acting through its business group, UBS Investment Bank

International UnderwritingAgreement .......................................... Underwriting agreement to be dated on or about January 19, 2008

between us, Guoco Securities (Bermuda) Limited, the SellingShareholders and the International Underwriter

Joint Domestic Lead Underwriters .... ATR KimEng Capital Partners, Inc. and BDO Capital & InvestmentCorporation

Listing Date ....................................... The date of listing and when the trading of our Firm Shares commences

Local Small Investors ......................... Subscribers or purchasers of the Domestic Offer Shares who are willingto subscribe or purchase 1,000 Offer Shares under the Local SmallInvestors Program

Manual .............................................. Our Manual on Corporate Governance adopted by our Board of

Directors on June 21, 2007 and filed with the Philippine SEC onDecember 10, 2007

Nadeco Realty ................................... Nadeco Realty Corporation

Offer .................................................. The offer of the Offer Shares, including the Optional Shares, pursuantto the Domestic Offer and the International Offer

Offer Shares ....................................... The Firm Shares and the Optional Shares

Optional Shares ................................. The Shares relating to the Over-Allotment Option

Over-Allotment Option ..................... An option granted by The Nassim Fund to the Stabilizing Agent,exercisable within 30 days from the date of this Prospectus, to purchaseadditional Shares comprising up to 15% of the Firm Shares to cover

over-allotments, if any

PAS .................................................... Philippine Accounting Standards

PCD .................................................... Philippine Central Depository

PDS .................................................... Philippine Dealing System

PDTC ................................................. Philippine Depository and Trust Corp., the central securities depositaryof, among others, securities listed and traded on the PSE

PepsiCo .............................................. PepsiCo, Inc., including its subsidiaries Quaker Global InvestmentsB.V. and PepsiCo Far East Trade Development Inc.

pesos or P= ........................................... The lawful currency of the Philippines

PET ..................................................... Polyethylene terephthalate, a type of plasticPFRS .................................................. Philippine Financial Reporting Standards

Glossary of Terms

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Philippine Constitution orConstitution ....................................... The Constitution of the Republic of the Philippines

Philippine Corporation Code ............ Batas Pambansa Blg. 68, otherwise known as “The Corporation Codeof the Philippines”

Philippine GAAS ................................ Generally accepted auditing standards in the PhilippinesPhilippine National ............................ As defined under Republic Act No. 7042, as amended, otherwise

known as the Foreign Investments Act of the Philippines, means acitizen of the Philippines, or a domestic partnership or associationwholly owned by citizens of the Philippines, or a corporation organizedunder the laws of the Philippines of which at least 60% of the capitalstock outstanding and entitled to vote is owned and held by citizens of the Philippines, or a corporation organized abroad and registered to dobusiness in the Philippines under the Philippine Corporation Code, of which 100% of the capital stock outstanding and entitled to vote iswholly owned by citizens of the Philippines or a trustee of funds forpension or other employee retirement or separation benefits, where the

trustee is a Philippine National and at least 60% of the funds willaccrue to the benefit of Philippine Nationals

Philippine SEC ................................... The Securities and Exchange Commission of the Philippines

Philippines........................................... Republic of the Philippines

PSE ..................................................... The Philippine Stock Exchange, Inc.

PSE Brokers ....................................... The trading participants of the PSE in the Philippines

QIBs.................................................... Qualified institutional buyers within the meaning of Rule 144A

Regulation S........................................ Regulation S under the U.S. Securities Act

RGBs................................................... Returnable glass bottles

Rule 144A........................................... Rule 144A under the U.S. Securities ActS&P ................................................... Standard & Poor’s Ratings Services, a division of the McGraw-Hill

Companies, Inc.

SARS .................................................. Severe Acute Respiratory Syndrome

Secondary Offer.................................. 761,565,787 existing Shares offered by the Selling Shareholders

Selling Shareholders ............................ Guoco Assets (Philippines), Inc. and The Nassim Fund

Shares.................................................. Our shares of common stock, par value P=0.15 per share

SRC .................................................... Republic Act No. 8799, otherwise known as “The SecuritiesRegulation Code of the Philippines,” as amended from time to time,and including the rules and regulations issued thereunder

Stabilizing Agent ................................ UBS AG, acting through its business group, UBS Investment Bank

Stock Transfer Agent ......................... Stock Transfer Service, Inc.

Subsidiary .......................................... A company in which we own, directly or indirectly, at least a majorityof the outstanding capital stock

Trading Participants .......................... Member brokers of the PSE

Underwriters ...................................... The Domestic Underwriters and the International Underwriter

United States or U.S. ......................... The United States of America

U.S.$ or U.S. dollar ............................ The lawful currency of the United States of America

U.S. Securities Act............................... The United States Securities Act of 1933, as amended

VAT..................................................... Value-added tax

Glossary of Terms

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This summary highlights information contained elsewhere in this Prospectus. This summary is qualified in itsentirety by more detailed information and financial statements, including notes thereto, appearing elsewhere inthis Prospectus. For a discussion of certain matters that should be considered in evaluating an investment in theOffer Shares, see “Risk Factors.” Investors are advised to read this entire Prospectus carefully, including ourfinancial statements and related notes contained herein.

OVERVIEW

We are the licensed bottler of PepsiCo beverages in the Philippines. We manufacture a range of carbonated andnon-carbonated beverages and distribute them to retail outlets throughout the Philippines. Our portfolio of products includes cola and flavored carbonated beverages, including low-calorie derivatives, as well as juices,iced teas, sports drinks and energy drinks. Our brands include well-known beverage brands such as Pepsi, DietPepsi, Pepsi Max, 7Up, Diet 7Up, Mountain Dew, Gatorade, Lipton Iced Tea, Tropicana, Propel and Sting. Infiscal 2007, we sold 120.4 million eight-ounce case equivalents of carbonated beverages and 12.1 millioneight-ounce case equivalents of non-carbonated beverages.

We manufacture and package our products at 11 production plants throughout the Philippines, and distributethem through 101 warehouses and 99 sales offices (generally co-located), together with an extensive third partydistribution network, to approximately 275,000 outlets, including supermarkets, restaurants, bars, and smallgrocery stores. Most of our carbonated beverages and some of our non-carbonated beverages are sold inreturnable glass bottles, or RGBs, which are returned to the retailer upon consumption of the beverage forrepayment of a deposit and subsequently collected, washed and reused.

Pepsi-Cola has been continuously manufactured in the Philippines since 1946, when the business that we nowoperate was first established. We were incorporated on March 8, 1989 when the business was acquired byinterests associated with the Lorenzo family. Affiliates of the Guoco Group acquired the company in 1997 andsold a minority stake to PepsiCo, Inc. in 1998. The Guoco Group currently holds 40.3%. PepsiCo holds 32.9%.

Our other minority shareholders include The Nassim Fund, which holds 21.6%, and Orion Land, Inc., whichholds 4.5%. Other small shareholders, including certain executives and employees, own the remaining 0.7%. Forinformation regarding our expected shareholder structure following completion of this offering, see “Principaland Selling Shareholders.” We have not, in the past three years, been a party to any material reclassification,merger, consolidation or purchase or sale of a significant amount of assets.

COMPETITIVE STRENGTHS

We believe that our competitive strengths include:

➣ Strong relationship with PepsiCo — in addition to licensing us to produce PepsiCo products, PepsiCoprovides us with marketing support and contributes the benefit of its global experience and expertise in

production and distribution. PepsiCo has an active product development program. We are able to accessPepsiCo’s new products for the Philippines market, so that we do not need to make large productdevelopment expenditures. We, PepsiCo and certain PepsiCo affiliates have entered into a new 10-yearExclusive Bottling Appointment, dated as of April 11, 2007. A particular benefit of the agreement is thatit provides for fixed pricing (as a percentage of the sales price of the finished product) for beverageconcentrates, locking in a major component of our cost of goods sold at what we believe is a favorable rate.Note, however, that PepsiCo could terminate the agreement early if we commit certain breaches. See “—Relationship with PepsiCo” and “Risk Factors — Because we produce our products under licenses fromPepsiCo and depend upon PepsiCo to provide us with concentrates, marketing support and access to newproducts, changes in our relationship with PepsiCo could adversely affect our business and financialresults.”

The brands we license from PepsiCo include some of the world’s best-known brands, including Pepsi, PepsiMax, Pepsi Light, Mountain Dew, 7Up, Diet 7Up and Gatorade. We license Lipton’s Iced Tea from aPepsiCo/Unilever joint venture. There is a high degree of awareness of global brands in the Philippines, duein part to the prevalence of the English language, the consumption of Western, and particularly U.S., media

Summary

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and entertainment and the large numbers of Philippine citizens who work overseas or have relatives whodo so. Pepsi has been continuously marketed in the Philippines for the last 61 years. We believe that ourhigh brand recognition enables us to sell more products with a lower marketing cost than a competitor withlesser-known brands. PepsiCo named us its 2006 “Pepsi Bottler of the Year — Asia.”

➣ Strong portfolio of non-carbonated beverage products — we entered the non-carbonated beverage

market in 2004, and since then, we have introduced five new brands in the Philippines, includingTropicana, Gatorade, and Lipton Iced Tea, and launched over 80 new products (including new flavors,packages and sizes) in new categories including juices, iced teas, sports drinks, energy drinks and vitaminwaters. We believe that our ability to execute new brand and product launches, particularly in thefast-growing non-carbonated beverage space, will be a key to our future success.

➣ Established manufacturing and distribution platform — a majority of the carbonated beveragesconsumed in the Philippines are sold in RGBs, which results in more affordable products for consumers.Selling RGBs requires significant capital investment in a “float” of RGBs and plastic shells and a capital-and labor-intensive distribution network that is able both to deliver products to the many small outletsthrough which beverages are sold and collect empty RGBs for reuse. The RGB model also requires thatbottling plants are located nearby the markets they serve. Currently, we believe that only we and one other

competitor have an established platform for manufacturing and distributing beverages in RGBs throughoutthe Philippines. We believe we have exhibited a proven ability to manage large-scale operations, qualitycontrol mechanisms and supply chain relationships across our 11 locations throughout the country, andthat the cost and complexity involved in establishing such a platform represent significant barriers to entryfor potential competitors.

➣ Experienced management team — our senior management team has an average of over 18 years’experience in the beverages industry. Our CEO was previously a senior executive with the Guoco Groupand our CFO has been seconded to us by PepsiCo. We believe that the ability to draw from the deepmanagement pool that these major shareholders possess represents a significant additional competitiveadvantage. Over recent years, our management has taken an active stance to build a strong organizationbased on the solid foundation of our company’s values. The Management Development Program and other

leadership training courses within Pepsi University allow for the development of future leaders within andreinforce our succession planning program.

➣ Stable financial base — in recent years, we have consistently generated positive operational cash flow, andas of September 30, 2007, had only P=532.8 million of outstanding debt. As of September 30, 2007, our debtto equity ratio was 15.4%. We believe that our stable cash flow and low debt give us a solid platform forfuture growth, as well as the flexibility to weather future economic downturns.

STRATEGY

We have two principal strategic goals: to extract greater profitability out of our existing brands and productionassets by increasing our market share; and to diversify our product portfolio, in particular by capitalizing on the

growing demand for beverages associated with health and wellness by rolling out new products targeting thesecategories.

The key elements of our strategy include:

➣ Increase market share in carbonated beverages — we aim to increase our share of the market forcarbonated beverages by increasing the reach of our distribution network. This will include a significantinvestment in the infrastructure necessary to increase the number of outlets in which our products are sold,including increasing our investment in RGBs, plastic cases and in-store refrigeration equipment. We believethis is integral to increasing our market share in carbonated beverages and to expanding ournon-carbonated beverage business. Within the carbonated beverage category, we aim to defend our volumeand market share for regular cola while aggressively growing Mountain Dew, 7Up and non-sugar colas.

➣ Increasing production capacity — we intend to increase our production capacity by overcomingapproaching capacity constraints in our production of carbonated beverages and expanding our thecapacity to produce non-carbonated beverages, which we currently produce only at our Muntinlupa plant

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in Metro Manila, at other plants. We intend to achieve both objectives by installing “combi” lines, capable

of producing both carbonated and non-carbonated beverages in both RGB and PET bottles, in at least four

of our plants outside Metro Manila by 2009. We believe that expanding production capacity at our other

plants will enable us to lower our freight and distribution costs. Using combi lines enables us to deploy

production capacity efficiently in response to changing demand.

➣ Expanding our non-carbonated beverage portfolio — as a response to increasing health awareness in

the Philippines, we have expanded our range of non-carbonated beverage products. We intend to further

diversify this range by continuing to add new products from the PepsiCo development pipeline and believe

that further growth is possible in the hydration sector with our sports and vitamin water beverage products.

In addition, we aim to capitalize on the strength of our Gatorade, Tropicana, Lipton and Propel brands and

to drive sales and profit by expanding these products into more affordable packaging formats. Ultimately,

our aim is to obtain and hold the number one or two market share ranking in each of our major

non-carbonated beverage product categories.

COMPANY INFORMATION

We are a Philippine corporation with our registered office and principal executive offices located at Km. 29,National Road, Tunasan, Muntinlupa City, 1773 Philippines. Our telephone number is +63-2-850-7901.

INFORMATION RELATING TO THE SHARES

Authorized number of Shares .................................................................................................... 5,000,000,000

Shares outstanding before the Offer .......................................................................................... 3,312,989,386

Shares outstanding after the Offer .............................................................................................. 3,693,772,279

Market Capitalization at the Offer Price of P=3.50 Per Offer Share(1) .......................................P=12,928,202,977

Note:

(1) Computed at the Offer Price of P=3.50 per Offer Share multiplied by the equivalent number of Shares outstanding after the Offer. The

PSE computes market capitalization based on the number of listed shares multiplied by the market price.

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Issuer................................................... Pepsi-Cola Products Philippines, Inc., a corporation organized underthe laws of the Philippines.

Selling Shareholders ............................ Guoco Assets (Philippines), Inc. and The Nassim Fund.

The Offer ............................................ Offer of Firm Shares, consisting of 380,782,893 new Shares to beissued and offered by us, and 761,565,787 existing Shares to be offeredby the Selling Shareholders and an offer of up to 171,352,302 OptionalShares pursuant to the Over-Allotment Option (as described below).799,644,680 of the Firm Shares are being offered and sold outside thePhilippines and the United States to non-U.S. persons in reliance onRegulation S under the U.S. Securities Act and within the United Statesto QIBs in reliance on Rule 144A as part of the International Offer.342,704,000 of the Firm Shares are being offered and sold to all of thePSE Brokers and Local Small Investors as part of the Domestic Offer inthe Philippines. 228,361,000 of the Domestic Shares are being offered

and sold to PSE Brokers and 114,343,000 of the Domestic Offer Sharesare being sold to Local Small Investors. ATR KimEng and BDO Capitalwill act as the Joint Domestic Lead Underwriters. Domestic OfferShares not taken up by the PSE Brokers and Local Small Investors willbe purchased by the Domestic Underwriters and sold to their respectiveclients or the general public prior to the close of the Domestic Offer.The Optional Shares will form part of the International Offer.

Offer Price .......................................... P=3.50 per Offer Share.

Over-Allotment Option....................... The Nassim Fund has granted the Stabilizing Agent an option,exercisable in whole or in part to purchase up to 171,352,302 OptionalShares at the Offer Price, on the same terms and conditions as the FirmShares as set forth in this Prospectus, solely to cover over-allotments, if any. The Over-Allotment Option is exercisable from and including theListing Date and ending on the date 30 days from the date of thisProspectus. See “Plan of Distribution — The Over-Allotment Option.”

Domestic Offer Period ........................ The Domestic Offer Period shall commence at 9:00 a.m., Manila time,on January 21, 2008 and end at 11:00 a.m. (Manila time) on January28, 2008. We and the Joint Domestic Lead Underwriters reserve theright to extend or terminate the Domestic Offer Period with theapproval of the Philippine SEC and the PSE.

Applications must be received by the Domestic Receiving Agent notlater than 11:00 a.m. (Manila time) on January 25, 2008, with respectto Applications to be submitted through the PSE Brokers and by Local

Small Investors, and not later than 1:00 p.m. (Manila time) on January28, 2008 with respect to the Domestic Offer Shares to be applied for byother domestic investors. Applications received thereafter or withoutthe required documents will be rejected. Applications shall beconsidered irrevocable upon submission to the Domestic Selling Agentor Domestic Underwriter, and shall be subject to the terms andconditions of the offer as stated in this Prospectus and in theApplication. The actual purchase of the Domestic Offer Shares shallbecome effective only upon the actual listing or crossing of theDomestic Offer Shares on the PSE and upon the obligations of theDomestic Underwriters under the Domestic Underwriting Agreementbecoming unconditional and not being suspended, terminated orcancelled on or before the Listing Date or Crossing Date in accordancewith the provisions of such agreement.

Summary of the Offer

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Eligible Investors................................. The Shares offered in the Domestic Offer may be purchased by anynatural person of legal age residing in the Philippines regardless of nationality, or any corporation, association, partnership, trust account,fund or entity residing in and organized under the laws of thePhilippines and/or licensed to do business in the Philippines, regardlessof nationality, subject to our right to reject an Application or reduce the

number of our Firm Shares applied for subscription or purchase if thesame will cause us to be in breach of the Philippine ownershiprequirement under relevant Philippine laws.

Subscription to, and purchase of, the Firm Shares in certainjurisdictions may be restricted by law. Foreign investors interested insubscribing or purchasing the Firm Shares should inform themselves of the applicable legal requirements under the laws and regulations of thecountries of their nationality, residence or domicile, and as to anyrelevant tax or foreign exchange control laws and regulations affectingthem personally. Foreign investors, both corporate and individual,warrant that their purchase of the Firm Shares will not violate the lawsof their jurisdiction and that they are allowed to acquire, purchase andhold the Firm Shares.

Restrictions on Ownership ................. The Philippine Constitution and related statutes set forth restrictionson foreign ownership of companies engaged in certain activities.

In connection with the ownership of private land, Section 7 of ArticleXII of the Constitution, in relation to Section 3 of Article XII of theConstitution and Chapter 5 of Commonwealth Act No. 141, states thatno private land shall be transferred or conveyed except to citizens of thePhilippines or to corporations or associations organized under the lawsof the Philippines at least 60% of whose capital is owned by suchcitizens.

While we do not own land, we do have an equity interest in an affiliatethat directly owns land. See “Business — Properties.” In the event,however, that we decide to hold private land, we must comply withPhilippine law requirements that would constitute us as a PhilippineNational and allow us to directly own private lands in the Philippines.During that period, foreign ownership in us would be limited to amaximum of 40% of our issued and outstanding capital stock entitledto vote. Accordingly, we would not be permitted to allow the issuanceor the transfer of Shares to persons other than Philippine Nationals andwould not be able to record transfers in our books if such issuance ortransfer would result in our ceasing to be a Philippine National forpurposes of complying with the restrictions on foreign ownershipdiscussed above.

In addition, so long as the Exclusive Bottling Appointment granted byPepsiCo and certain PepsiCo affiliates authorizing us to producePepsiCo beverages, or its replacement agreement is in effect, our articlesof incorporation and by-laws generally prohibit acquisitions of ourShares that result in:

➣ a change of control;

➣ a manufacturer, bottler, seller or distributor of competingbeverages acquiring 10% or more of our Shares; or

➣ 20% or more of our Shares being acquired by any person otherthan our current shareholders.

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For more information relating to restrictions on the ownership of ourShares, see the sections entitled “Description of Share Capital,” “RiskFactors” and “Philippine Foreign Exchange and Foreign OwnershipControls.”

Transfer Restrictions........................... The Offer Shares are initially being offered and sold within the United

States to QIBs in reliance on Rule 144A and outside the United Statesto non-U.S. persons in reliance on Regulation S. The Offer Shares havenot been and will not be registered under the U.S. Securities Act and,subject to certain exceptions, may not be offered or sold within theUnited States or to, or for the benefit of, U.S. persons. See “Plan of Distribution — The International Offer.”

Dividends ........................................... Any dividends we pay will be at the discretion of the Board after takinginto account our operations, earnings, financial condition, cashrequirements, investment opportunities, the availability of credit, andother factors as the Board may consider relevant. In addition, ourpayment of dividends will be subject to the provisions and proceduresof our articles of incorporation and by-laws. Subject to the foregoing,

our present policy is to pay up to 50% of our annual net income individends. However, this policy may be subject to future revision.

Lock-up ............................................. We, Quaker Global Investments B.V., Hong Way Holdings, Inc., OrionLand Inc. and the Selling Shareholders have each agreed with theInternational Underwriter that, other than in connection with theOver-Allotment Option and certain other exceptions, for a period of 180 days after the First Closing Date, neither us nor any person actingon our behalf will, without the prior written consent of theInternational Underwriter issue, offer, sell, contract to sell, pledge orotherwise dispose of (or publicly announce any such issuance, offer,sale or disposal of) any Shares or securities convertible or exchangeableinto or exercisable for Shares or warrants or other rights to purchase

Shares or any security or financial product whose value is determineddirectly or indirectly by reference to the price of the underlyingsecurities, including equity swaps, forward sales and options. For moreinformation, see “Plan of Distribution.”

Use of Proceeds................................... See “Use of Proceeds” for details of how the total net proceeds from thePrimary Offer will be applied.

Minimum Subscription ....................... Each Application must be for a minimum of 1,000 Firm Shares, andthereafter, in multiples of 1,000 Firm Shares. Applications for multiplesof any other number of Shares may be rejected or adjusted to conformto the required multiple, at our discretion.

Reallocation ....................................... The allocation of the Offer Shares between the Domestic Offer and theInternational Offer is subject to adjustment. In the event of anunder-application in the International Offer and a correspondingover-application in the Domestic Offer, Offer Shares in theInternational Offer may be reallocated to the Domestic Offer (in anamount to be agreed by the Company, the Joint Domestic LeadUnderwriters and the International Underwriter). If there is anunder-application in the Domestic Offer and if there is a correspondingover-application in the International Offer, Offer Shares in theDomestic Offer may be reallocated to the International Offer (in anamount to be agreed by the Company, the Joint Domestic LeadUnderwriters and the International Underwriter). The reallocationshall not apply in the event of over-application in both the Domestic

Offer and the International Offer.

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Procedure for Application................... Application forms to purchase Offer Shares in the Domestic Offer maybe obtained from any Domestic Underwriter or Domestic Selling Agentlisted in this Prospectus. All Applications shall be evidenced by theapplication to purchase form, duly executed in each case by anauthorized signatory of the applicant and accompanied by onecompleted signature card which, for corporate and institutional

applicants, should be authenticated by the corporate secretary, and thecorresponding payment for the Firm Shares covered by the Applicationand all other required documents. The duly executed Application andrequired documents should be submitted during the Domestic OfferPeriod to the same office where it was obtained.

If the applicant is a corporation partnership or trust account, theApplication must be accompanied by the following documents:

➣ A certified true copy of the applicant’s latest articles of incorporation and by-laws and other constitutive documents(each as amended to date) duly certified by its corporatesecretary;

➣ A certified true copy of the applicant’s Philippine SEC certificateof registration duly certified by its corporate secretary; and

➣ A duly notarized corporate secretary’s certificate setting forth theresolution of the applicant’s board of directors or equivalent bodyauthorizing the purchase of the Firm Shares indicated in theApplication, identifying the designated signatories authorized forthe purpose, including his or her specimen signature, andcertifying to the percentage of the applicant’s capital or capitalstock held by Philippine Nationals.

Foreign corporate and institutional applicants who qualify as Eligible

Investors, in addition to the documents listed above, are required tosubmit in quadruplicate, a representation and warranty stating thattheir purchase of the Firm Shares to which their Application relates willnot violate the laws of their jurisdictions of incorporation ororganization, and that they are allowed, under such laws, to acquire,purchase and hold the Firm Shares.

Payment Terms ................................... The Firm Shares in the Domestic Offer must be paid for in full uponsubmission of the Application. Payment must be made by a checkdrawn against a bank in Manila to the order of “Pepsi-Cola ProductsPhilippines, Inc.” The check must be dated as of the date of submissionof the Application and crossed for deposit.

Acceptance/Rejection of Applications. The actual number of Firm Shares that an applicant will be allowed to

purchase in the Domestic Offer is subject to the confirmation of theDomestic Underwriter. Applications shall be subject to our finalapproval. We reserve the right to accept or reject, in whole or in part,any Application due to any grounds specified in the DomesticUnderwriting Agreement entered into by us, Guoco Assets(Philippines), Inc. and the Joint Domestic Lead Underwriters.Applications where checks are dishonored upon first presentation andApplications which do not comply with the terms of the DomesticOffer shall be rejected. Moreover, any payment received pursuant tothe Application does not mean our approval or acceptance of theApplication.

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Except for the issuance of Offer Shares pursuant to the Offer or Sharesfor distribution by way of stock dividends and certain option grantsand issuances under employee incentive schemes, the PSE will requireus, as a condition to the listing of the Shares, not to issue new shares incapital or grant any rights to or issue any securities convertible into orexchangeable for, or otherwise carrying rights to acquire or subscribe

to, any shares in its capital or enter into any arrangement or agreementwhereby any new shares or any such securities may be issued for aperiod of 180 days after the Listing Date. These restrictions are inaddition to the contractual lock-up described above.

Listing and Trading ............................ Our application for the listing of the Shares was approved by the PSEon October 10, 2007. All of the Shares in issue or to be issued,including the Offer Shares, are expected to be listed on the PSE onFebruary 1, 2008. Trading is expected to commence on the same date.

Tax Considerations............................. See “Taxation” for further information on the tax consequences of thepurchase, ownership and disposition of the Offer Shares.

Expected Timetable............................. The timetable of the Offer is expected to be as follows:

(dates provided below are dates in the Philippines)

Pricing and allocation of theInternational Offer Shares............................... January 19, 2008

PSE Brokers’ Commitment Period .................. January 21-23, 2008

Joint Domestic Lead Underwriters’Offer Period .................................................... January 21-28, 2008

Domestic Offer Settlement Date ..................... February 1, 2008

International Offer Settlement Date................ February 1, 2008

Listing Date and commencement of trading on the PSE .......................................... February 1, 2008

The dates included above are subject to market and other conditionsand may be changed.

Risk Factors........................................ Prospective investors should carefully consider the risks connected withan investment in the Offer Shares, certain of which are discussed in thesection of this Prospectus titled “Risk Factors.”

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The following tables present summary financial information for us and should be read in conjunction with the

auditors’ reports and with our financial statements and notes thereto contained in this Prospectus and the section

entitled “Management ’s Discussion and Analysis of Financial Condition and Results of Operations.” Thesummary financial information presented below as of and for the years ended June 30, 2005 and 2006 was

derived from the consolidated financial statements of PCPPI, prepared in accordance with PFRS and audited by

MS & Co. The summary financial information as of and for the year ended June 30, 2007 was derived from the

financial statements of PCPPI, audited by MS & Co. and prepared in accordance with PFRS. The summary

financial information as of September 30, 2007 and for the three month periods ended September 30, 2006 and

2007 was derived from the financial statements of PCPPI, prepared in accordance with PFRS and audited by MS

& Co. The information below is not necessarily indicative of the results of future operations. Furthermore, the

translation of peso amounts to U.S. dollars is provided for convenience only. For additional information

regarding financial information presented in this Prospectus, see “Presentation of Financial Information.”

For the years ended June 30,

For the three months ended

September 30,

2005 2006 2007 2007(1) 2006 2007 2007(1)

P= P= P= U.S.$ P= P= U.S.$

(in millions, except per Share figures and where indicated)

Revenues

Net sales ................................... 8,932.5 10,992.8 12,916.2 286.6 2,753.0 3,198.9 71.0

Cost of goods sold.................... 5,622.7 7,252.8 8,760.0 194.4 1,933.0 2,193.9 48.7

Gross Profit............................... 3,309.8 3,740.0 4,156.2 92.2 820.0 1,005.0 22.3

Operating Expenses

Selling and distribution ............. 1,224.9 1,434.7 1,594.3 35.3 374.6 446.7 9.9

General and administrative....... 507.5 536.3 598.5 13.3 141.5 191.1 4.2Marketing expenses .................. 524.2 424.1 468.3 10.4 134.5 176.6 3.9

2,256.6 2,395.1 2,661.1 59.0 650.6 814.4 18.0

Income From Operations.......... 1,053.2 1,344.9 1,495.1 33.2 169.4 190.6 4.3

Net Finance and Other Income

(Expense) .............................. (146.9) (55.3) 24.5 0.5 (7.8) 4.5 0.1

Income Before Tax ................... 906.3 1,289.6 1,519.6 33.7 161.6 195.1 4.4

Income Tax Expense ............... 139.0 420.9 518.2 11.5 55.9 48.6 1.1

Net Income .............................. 767.3 868.7 1,001.4 22.2 105.7 146.5 3.3

Earnings Per Share

Basic.......................................... 0.23 0.26 0.30 0.007 0.03 0.04 0.00

Note:

(1) For the readers’ convenience, amounts in pesos were converted to U.S. dollars using the BSP Rate of P=45.063 to U.S.$1.00 as of

September 28, 2007.

Summary Financial Information

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As at June 30, As at September 30,

2005 2006 2007 2007(1) 2007 2007(1)

P= P= P= U.S.$ P= U.S.$


ASSETS

Current AssetsCash and cash equivalents............................. 333.1 477.8 632.3 14.0 245.3 5.5Receivables — net ......................................... 647.3 658.7 828.3 18.4 771.7 17.1

Inventories — net . ......................................... 401.7 512.5 600.9 13.3 667.3 14.8Due from a related party(2) ........................... — — 133.3 3.0 134.9 3.0Prepaid expenses and other current assets .... 54.4 31.8 61.0 1.4 63.4 1.4

Total Current Assets ................................ 1,436.5 1,680.8 2,255.8 50.1 1,882.6 41.8

Noncurrent Assets

Bottles and cases — net ................................. 1,091.8 1,324.1 1,687.6 37.4 1,679.9 37.3Investments in associates ............................... — — 505.5 11.2 506.4 11.2

Property, plant and equipment — net ........... 2,417.6 2,440.2 2,158.1 47.9 2,368.5 52.6Deferred income tax...................................... 196.3 195.5 40.4 0.9 — —

Other assets ................................................... 38.0 75.7 137.9 3.1 173.2 3.8Total Noncurrent Assets .......................... 3,743.7 4,035.5 4,529.5 100.5 4,728.0 104.9

5,180.2 5,716.3 6,785.3 150.6 6,610.6 146.7

LIABILITIES AND EQUITY

Liabilities

Current Liabilities

Notes payable ................................................ 328.4 48.6 48.6 1.1 428.6 9.5

Accounts and acceptances payable and

accrued expenses ....................................... 1,821.0 1,962.0 2,201.2 48.8 2,065.7 45.8

Income tax payable ....................................... 92.2 183.7 271.1 6.0 203.5 4.5Dividends payable ......................................... — 99.4 400.0 8.9 — —

Due to a related party ................................... — — 53.4 1.2 52.2 1.2Current portion of long-term debt ................ 154.6 116.7 241.7 5.4 83.3 1.8

Total Current Liabilities ........................... 2,396.2 2,410.4 3,216.0 71.4 2,833.3 62.8

Noncurrent LiabilitiesLong-term debt — net of current portion..... 255.8 333.3 41.7 0.9 20.8 0.5Accrued retirement cost — net of current

portion....................................................... 159.5 131.6 203.9 4.5 210.9 4.7Deferred tax liability ..................................... 125.2 117.7 — — 75.4 1.7

Total Noncurrent Liabilities ..................... 540.5 582.6 245.6 5.4 307.1 6.9

Total Liabilities ........................................ 2,936.7 2,993.0 3,461.6 76.8 3,140.4 69.7

EquityCapital stock.................................................. 496.9 496.9 496.9 11.0 496.9 11.0Additional paid-in capital.............................. 59.5 59.5 59.5 1.3 59.5 1.3Effect of dilution of ownership

in an investment ........................................ — — (1.0) — (1.0) —Revaluation increment on land ..................... 266.0 274.6 — — — —Retained earnings .......................................... 1,421.1 1,892.3 2,768.3 61.5 2,914.8 64.7

Total Equity ............................................. 2,243.5 2,723.3 3,323.7 73.8 3,470.2 77.0

5,180.2 5,716.3 6,785.3 150.6 6,610.6 146.7

Notes:

(1) For the readers’ convenience, amounts in pesos were converted to U.S. dollars using the BSP Rate of P=45.063 to U.S.$1.00 as of September 28, 2007.

(2) Classified as a current asset in our interim balance sheet as at September 30, 2007 with comparative balance as at June 30, 2007 asshown on page F-42.

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For the years ended June 30,For the three months ended

September 30,

2005 2006 2007 2007(1) 2006 2007 2007(1)

P= P= P= U.S.$ P= P= U.S.$


Key performance indicatorsand ratiosGross sales ................................ 10,581.1 12,803.4 15,062.2 334.2 3,209.7 3,767.7 83.6Net sales ................................... 8,932.5 10,992.8 12,916.2 286.6 2,753.0 3,198.9 71.0EBIT(2) ..................................... 990.5 1,369.6 1,572.1 34.9 175.5 201.3 4.5EBIT margin(3) .......................... 11.1% 12.5% 12.2% — 6.3% 6.3% —EBITDA(4) ................................ 1,637.1 2,073.0 2,385.6 52.9 369.5 422.7 9.4EBITDA margin(5) ................... 18.3% 18.9% 18.5% — 13.4% 13.2% —Gross margin(6) ........................ 37.1% 34.0% 32.2% — 29.8% 31.4% —Return on equity(7) ................... 34.2% 31.9% 30.1% — — — —Return on assets(8) .................... 14.8% 15.2% 14.8% — — — —Capital expenditures(9).............. 1,060.2 938.9 1,616.8 35.9 355.2 427.7 9.5Net income ............................... 767.3 868.7 1,001.4 22.2 105.7 146.5 3.3Net cash provided by (used in)

operating activities ................ 1,611.3 1,679.0 2,121.3 47.1 284.7 274.1 6.1Net cash provided by (used in)

investing activities................. (1,082.0) (996.1) (1,700.8) (37.7) (364.0) (462.0) (10.3)Net cash provided by (used in)

financing activities . ............... (519.0) (538.3) (266.0) (5.9) 0.6 (199.2) (4.4)Debt-to-equity ratio(10) ............ 32.9% 18.3% 10.0% — 21.2% 15.4% —

Notes:

(1) For the readers’ convenience, amounts in pesos were converted to U.S. dollars using the BSP Rate of P=45.063 to U.S.$1.00 as of

September 28, 2007.

(2) EBIT represents net income after adding income tax expense and interest expense. EBIT is not a measure of performance under PFRS

and investors should not consider EBIT in isolation or as an alternative to operating income or net income as an indicator of our

operating performance or to cash flow from operating, investing and financing activities as a measure of liquidity, or any other

measures of performance under PFRS. Because there are various EBIT calculation methods, our presentation of EBIT may not be

comparable to similarly titled measures used by other companies.

(3) Represents EBIT divided by net sales.

(4) EBITDA represents net income after adding income tax expense, depreciation and amortization and interest expense. EBITDA is not

a measure of performance under PFRS andinvestors should not consider EBITDA in isolation or as an alternativeto operating income

or net income as an indicator of our operating performance or to cash flow from operating, investing and financing activities as a

measure of liquidity, or any other measures of performance under PFRS. Because there are various EBITDA calculation methods, our

presentation of EBITDA may not be comparable to similarly titled measures used by other companies.

(5) Represents EBITDA divided by net sales.

(6) Represents gross profit (computed as net sales less cost of goods sold) as a percentage of net sales.

(7) Represents net income divided by total stockholders’ equity.

(8) Represents net income divided by total assets.

(9) Capital expenditure includes net additions to bottles and cases and property, plant and equipment.

(10) Debt-to-equity ratio is computed as total funded and interest bearing debt divided by total stockholders’ equity.

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An investment in the Shares involves a number of risks. The price of securities can and does fluctuate, and anyindividual security may experience upward or downward movements and may even become valueless. There isan 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 and there may be a large difference between the buying price and the selling price of these securities. Investors deal with a range of investments, each of which may carrya different level of risk. Investors should carefully consider all the information contained in this Prospectus,including the risk factors described below, before deciding to invest in the Shares. The occurrence of any of thefollowing events, or other events not currently anticipated, could have a material adverse effect on our business,financial condition and results of operations and cause the market price of the Shares to decline. All or part of an investment in the Shares could be lost.

The means by which we plan to address the risk factors discussed herein are principally presented in the sectionsof this Prospectus entitled “Business — Competitive Strengths” on pages 57 to 58, “Business — Strategy” on pages 58 to 59 and “Management ’s Discussion and Analysis of Financial Condition and Results of Operations”on pages 37 to 56. This section entitled “Risk Factors” does not purport to disclose all of the risks and other

significant aspects of investing in these securities. Investors should undertake independent research and study thetrading of securities before commencing any investment or trading activity. Investors should seek professional advice regarding any aspect of the securities such as the nature of risks involved in the investment in or trading of securities, and specifically those of high risk securities. Investors may request publicly available informationon the Shares and us from the Philippine SEC.

RISKS RELATED TO OUR BUSINESS

Because we produce our products under licenses from PepsiCo and depend upon PepsiCo to provide uswith concentrates, marketing support and access to new products, changes in our relationship withPepsiCo could adversely affect our business and financial results.Our relationship with PepsiCo and the rights we have under our Exclusive Bottling Appointment from PepsiCo

and certain of its affiliates are fundamental to our business. Under these appointments, we are licensed to produceand sell PepsiCo products in the Philippines, and PepsiCo has agreed to provide us with marketing support andother services that assist in the production and sale of PepsiCo products. PepsiCo has the right to terminate ourExclusive Bottling Appointment if:

➣ we fail to perform or comply with the terms or conditions of the appointment, provided that PepsiCo mustgive us written notice of the failure and 30 days to rectify the failure;

➣ certain specified competitors, or any manufacturer or distributor anywhere in the world of any productwhich competes with the beverages licensed to us acquires 10% or more of our Shares;

➣ any person (other than the existing shareholders) acquires 20% or more of our Shares;

➣ we discontinue bottling the beverages for a period of 30 consecutive days;

➣ certain events occur related to our insolvency or bankruptcy;

➣ our management or control of our business changes by virtue of any law, decree, order, rule, regulation,ordinance or any other similar cause; or

➣ any of our Exclusive Bottling Appointments (other than our Lipton Exclusive Bottling Appointment) isterminated.

In addition, if, in the reasonable opinion of PepsiCo, we should at any time fail to vigorously market the sale of the beverages in, or secure full coverage for, any part of the Philippines, PepsiCo may, after notifying us of the

failure and allowing us three months to correct the failure, remove that area from our appointment.

For more details regarding our Exclusive Bottling Appointments, see “Business — Relationship with PepsiCo”and “Related Party Transactions —— Transactions with PepsiCo” and “Material Contracts.”

Risk Factors

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If our Exclusive Bottling Appointments with PepsiCo and certain of its affiliates are suspended, terminated or notrenewed for any reason, it would have a material adverse effect on our business and financial results.

We may not be successful in executing our growth strategy, part of which depends on successfullydeveloping a new range of non-carbonated beverages to capitalize on current consumer trends

towards health and wellness beverages.In recent years, the market for carbonated beverages in the Philippines has grown considerably slower than theeconomy as a whole, due to the maturity of the market and an increasing consumer preference for beveragesassociated with health and wellness, in particular non-carbonated beverages such as juices, iced teas, sportsdrinks and water. We began manufacturing and selling non-carbonated beverages in 2004, and since that time,our annual sales of non-carbonated beverages have grown to approximately 12 million eight-ounce caseequivalents, while during the same period, our sales of carbonated beverages have grown approximately 15.4%from approximately 104 million eight-ounce case equivalents to approximately 120 million eight-ounce caseequivalents.

A key part of our strategy is to continue to grow our sales of non-carbonated beverages. Our existingnon-carbonated beverage products have short sales histories in the Philippines, and we cannot assure you that we

will be successful in continuing to grow our sales of these products. In addition, our strategy depends on ourability to successfully launch new non-carbonated beverages. When we launch new products, there is a risk thatthey will not be successful for a variety of reasons, including failing to appeal to consumer tastes, unsuccessfulmarketing and competitor actions. In addition, because we rely mainly on PepsiCo to develop or acquire rightsto the products that we sell, if PepsiCo fails to develop or acquire innovative products that respond to changingconsumer demands and are suitable for the Philippines market, or if we do not choose appropriate products fromPepsiCo’s range and package and market them effectively, we may not be successful in launching new productsand growing our business.

If our new products are not successful, we may be unable to grow our business as we expect, or at all, and wemay not recover the investments we make in developing and launching those products, which may have amaterial adverse effect on our financial results.

We may not be able to compete successfully within the highly competitive carbonated andnon-carbonated beverage markets.The carbonated and non-carbonated beverage markets are both highly competitive. We compete with TheCoca-Cola Company, which owns 100% of the local Coca-Cola bottler in the Philippines. The Coca-ColaCompany has a significantly larger share of the market for carbonated beverages in the Philippines than we do.We also compete with several large Philippines-based corporations, including San Miguel Corporation, UniversalRobina Corporation and Zesto Corporation. Our competitors’ brands include some of the mostwidely-recognized brands in the world. Branding and marketing are extremely important in the beveragesmarket, and if our competitors are more successful in marketing their products and building and promoting theirbrands than we are, we could fail to grow, or even lose market share, which could have a material adverse effecton our business and financial results.

Competing effectively will require continuous efforts in sales and marketing of our existing products,development of new products and efficient operations. We cannot predict the pricing or promotional actions of our competitors or their effect on our ability to market and sell our products. We cannot assure investors thatour sales volume or market shares would not be adversely affected by negative consumer reaction to ourrelatively higher prices as a result of any price reduction or promotional sales undertaken by our competitors,that we will not be forced to reduce our prices to meet our competition, or that we will otherwise be able tocompete effectively.

Some of our smaller competitors have lower cost bases than we do and price their products lower than ours. If we were forced to compete with these companies on price in order to retain market share it would significantlyreduce our margins and profitability. Historically, our carbonated beverage products have tended to be pricedslightly below the comparable products of The Coca-Cola Company. If The Coca-Cola Company were to reduceits prices for those products, we may be forced to reduce our prices as well, which could have a material adverseeffect on our margins and profitability.

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Our business requires a significant supply of raw materials and energy, the limited availability orincreased costs of which could adversely affect our business and financial results.The production and distribution of our beverage products is highly dependent on an adequate supply of certainraw materials. Apart from the beverage concentrates that we purchase from PepsiCo, our largest raw materialsexpenditure has been and is expected to continue to be for sugar, which comprised approximately 26% of our

cost of goods sold in fiscal 2006 and fiscal 2007. We purchase sugar from a small number of suppliers in thePhilippines, generally under short-term contracts of less than one year. The sugar industry in the Philippines isprotected by a system of import quotas and tariffs, and, as a result, sugar prices may from time to time exceedprices available on the international markets. Our ability to achieve certainty with respect to sugar prices islimited by the unwillingness of Philippines sugar producers to enter into long-term sales contracts and the absenceof a liquid market for financial instruments to hedge the Philippines sugar price.

We also purchase materials such as glass and plastic bottles, aluminum cans, plastic cases and carbon dioxidefrom a variety of local and regional producers and purchase diesel fuel for our trucks. The cost and supply of these specific materials could be adversely affected by price changes, strikes, weather conditions, governmentalcontrols or other factors. Because we may only use suppliers that meet PepsiCo ’s global standards, we may notbe able to select the lowest-cost suppliers, or stimulate price tension between competing suppliers. We cannot

assure you that the price we pay for our raw materials will be stable or the most competitive in the future. Pricechanges to our raw materials may result in unexpected increases in production, packaging and distribution costs,and we may be unable to increase the prices of our products to offset these increased costs and therefore maysuffer a reduction to our profit margins. We also do not currently hedge against changes in raw material prices.

Interruption to or a shortage in the supply of the raw materials and/or other supplies used by us could preventus from operating our manufacturing facilities at full capacity, and if the shortage is severe, could lead to thesuspension of our production all together.

If we are unable to maintain brand image and product quality, or if we encounter other product issuessuch as product recalls, our business may suffer.Maintaining our brand image and reputation for product quality is critical to our success. If we fail to maintain

high quality standards for our products, or if we fail to maintain high ethical, social and environmental standardsfor all of our operations and activities, our reputation could be jeopardized. In addition, we may be liable if theconsumption of any of our products causes injury or illness, and we may be required to recall products if theybecome contaminated or damaged or are mislabeled. The reputation of our products is also dependent on theworldwide reputation of PepsiCo products, which may be adversely affected by quality issues or contamination,or the actions of PepsiCo or other Pepsi bottlers in other countries, all of which are beyond our control. Asignificant product liability or other product-related legal judgment against us or another Pepsi bottler or awidespread recall of our or their products could have a material adverse effect on our reputation, business andfinancial results. In addition, if PepsiCo determines that our products do not meet its standards, it can require usto suspend production at the plant or plants responsible until appropriate remedial action is complete.

We are dependent on the continuing operation of our bottling plants, in particular our Muntinlupaplant.We manufacture substantially all of the products we sell at our 11 bottling plants throughout the Philippines.These plants are subject to the normal risks of industrial production, including equipment breakdowns, laborstoppages, natural disasters, directives from government agencies and power interruptions. In the past, we haveexperienced a number of power outages, including as a result of inadequate power generation and transmissioninfrastructure in the Philippines and natural disasters such as typhoons, which are common in the Philippines.While all of our plants have some back-up power generation capacity, it is only sufficient to maintain limitedoperations. As a result, any extended power supply interruption will result in reduced production at the affectedplant. Any interruption to production at any of these plants could materially reduce our production, sales revenueand profit.

We are particularly dependent on our Muntinlupa plant, which is our largest plant, accounting for approximately47.7%, 50.7% and 50.5% of our net sales in fiscal 2006, fiscal 2007 and the three month period endedSeptember 30, 2007, respectively. We manufacture all of our non-carbonated beverage products at Muntinlupa,as well as producing carbonated beverages for the Metro Manila market, which is our largest market. Any

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significant interruption in production at Muntinlupa could result in an interruption to our sales of

non-carbonated beverages throughout the Philippines and in our sales of carbonated beverages in Metro Manila,

which could have a material adverse effect on our business, results of operations, financial condition and

prospects, and particularly the growth of our non-carbonated beverages business.

We may have potential conflicts of interest with PepsiCo, which could result in PepsiCo’s objectivesbeing favored over our objectives.

Our past and ongoing relationship with PepsiCo could give rise to conflicts of interests. In addition to the

commercial relationship described above, PepsiCo is one of our substantial shareholders and four members of

our Board of Directors are senior executives of PepsiCo. See “— Our major shareholders could affect matters

concerning us.”

These conflicts could arise over matters such as:

➣ divergences between our strategic priorities and those of PepsiCo, including PepsiCo’s preference for us to

pursue products that require us to purchase concentrates from PepsiCo;

➣ the level of PepsiCo’s marketing contributions and the type of marketing activities we pursue as part of our

joint marketing program;

➣ balancing the objectives of increasing sales volume of PepsiCo beverages and maintaining or increasing our

profitability;

➣ the nature, quality and pricing of services or products provided to us by PepsiCo; or

➣ any proposal for us to acquire or divest territories, plants or products.

Our major shareholders could affect matters concerning us.

Following the Offering, PepsiCo will beneficially own approximately 29.5% of our outstanding Shares, while theGuoco Group will beneficially own approximately 30.1%. As a result of these shareholdings, each of PepsiCo

and the Guoco Group will be able to significantly affect the outcome of our shareholder votes, including the

election of directors, thereby affecting matters concerning us. The interest of these shareholders may not

necessarily be aligned with those of independent shareholders, and this concentration of ownership may also have

the effect of delaying, deferring or preventing a change in control of us. PepsiCo and the Guoco Group are parties

to a Cooperation Agreement, under which they have agreed to, among other things:

➣ support each other’s candidates for election to our Board of Directors;

➣ implement an agreed upon governance structure, including ensuring that their representatives serve on each

board committee; and

➣ entitle each other to appoint certain key executives and support each other’s appointees to such positions.

The parties have also agreed among themselves to certain rights in the event of a transfer by one of them. See

“Related Party Transactions — Transactions with Guoco and PepsiCo — Cooperation Agreement.”

Our success depends on key members of our board and management, the loss of whom could disrupt

our business operations.

Our directors and members of our senior management have been an integral part of our success, and the

experience, knowledge, business relationships and expertise that would be lost should any of these people departcould be difficult to replace and may result in a decrease in our operating efficiency and financial performance.

If we are not successful in retaining, or attracting and retaining executive talent to replace departing executives,

our business and results of operations may be adversely affected.

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Our operations are cash intensive, and our business could be adversely affected if we fail to maintainsufficient levels of working capital.We expend a significant amount of cash in our operations, principally to fund our raw material procurement. Infiscal 2006, fiscal 2007 and the three month period ended September 30, 2007, cash sales representedapproximately 57%, 53% and 46% of our net sales, respectively. Our credit terms for most customers are 30

days, although we offer some of our larger customers 60 or 75 days. Our obligations to PepsiCo, whichprincipally relate to concentrate purchases, are on seven days’ credit. We generally fund most of our workingcapital requirements out of cash flow generated from our operations. If we fail to generate sufficient cash fromour sales, or if we suffer decreasing sales to customers as a result of ceasing to offer credit terms, or if PepsiCoceases to offer credit terms, or we experience difficulties in collecting our accounts receivables, we may not havesufficient cash flow to fund our operating costs and we may have to incur debt to fund our operations (whichdebt facilities may not be available on reasonable terms or at all). In such event, our business could be adverselyaffected. See “Management’s Discussion and Analysis of Financial Condition