August 15, 2005

Dear Valued Investor,

We would like to inform you that the Securities and Exchange Commission (SEC) issued Circular No. 19, Series of 2004 in connection with the implementation of Philippine Accounting Standards (PAS) 39 beginning with annual financial statements ending December 31, 2005. Consequently, the SEC required that the valuation of all mutual funds be converted from an Accrual Method to a Mark-to-Market Method (MTM) starting September 30, 2005 to reflect the fair value of the underlying investments as of a given reporting period.

The circular covers your investment in the Prudentialife Fixed Income Fund, Inc. (the "Fund").

The Fund's assets are currently valued on an Accrual basis, also known as the amortized cost method of accounting. This means that the method records the value of each asset in the Fund at its purchase price, plus coupon (or interest) payments which are accrued on a daily basis. Hence, the accrual method does not reflect the actual price at which the assets in the Fund can be traded in the market.

In contrast, the MTM method will compute the value of each asset in a Fund at the prevailing market price as of the end of a given period. Bond prices change on a daily basis depending on various factors which affect the supply and demand of money in the financial market. In general, interest rates and prices have an inverse relation such that prices rise when interest rates drop, and vice versa. As such, the Fund's value will increase as bond prices rise. Conversely, the Fund's total value will decline as bond prices drop. The movement of the Fund's value, in turn, would allow investors to realize a larger gain when the market is up and buy additional shares when the market is down. Moreover, the shift to the MTM method would allow investors to know how much the Fund is really worth because of the transparent fund accounting method.

To help you better appreciate the differences between the two accounting methods, we will be sending you two (2) Net Asset Value computations based on the Accrual and MTM computation starting August 31, 2005.

For inquiries regarding the conversion to the MTM method and/or its effect on your investment, please call us at 814-0402, 812-8803, 845-4114 or 814-0095. For your reference, we are providing you with a Primer on Mark-to-Market Valuation which can also be viewed at http://optima.prudentialife.com.

Thank you.


Sincerely Yours,
Atty. Raymund P. Navarro
President