MANILA, PHILIPPINES—The Philam Asset Management Inc. (PAMI) said Tuesday investments in the mutual fund companies under its wings are safe and will not be affected by troubles facing American International Group (AIG), the company’s parent company.

Karen Liza M. Roa told INQUIRER.net in a telephone interview that under Philippine laws, mutual fund companies are legal entities of their own and are required to get third-party custodians to handle the funds.

“Yes, your investments are safe…It’s not the funds that are in trouble, it’s the fund manager’s parent company. We should all be very clear on that,” she said.

This means that should AIG close its doors under a worst-case scenario, PAMI may close shop but the fund itself will merely get a new fund manager.

PAMI is the second-biggest mutual fund management company in the Philippines, with around P19 billion assets under management.

“(Investments in PAMI-managed mutual funds) are not co-mingled with ours,” Roa said.

Under Philippine laws, mutual fund companies have separate and independent members in the board of directors and are required to follow the investment restrictions of the Securities and Exchange Commission and the Philippine Investment Company Act. This includes the obligation to buy back any shares that its investors want to redeem.

“If you take a look at your investments, they are in Philippine blue chips and in Philippine prime grade fixed income. Citibank is our third-party custodian,” Roa said.

AIG, one of the biggest insurance companies in the world, is the latest financial services company battered by the turmoil in the US housing and credit markets.