Petron Corporation (a company incorporated under the laws of the Republic of the Philippines ) AN AN OFFER TO BUY. UT OBLIGATION OR COMMITMENT OF AN BE ACCEPTED OR RECEIVED UNTIL COMMISSION, BUT HAS NOT YET BEEN SOLICITATION OF Primary Offer in the Philippines of [7,000,000] Perpetual Preferred Shares Series 2, with an Oversubscription Option of up to [3,000,000] Perpetual Preferred Shares Series 2 OF INTEREST IN RESPONSE HERETO INVOLVES Series 2A: [ ●] Series 2B: [ ●] at an Offer Price of [P1,000.00] per Preferred Share to be listed and traded on the Main Board of The Philippine Stock Exchange, Inc. Global Coordinator Joint Lead Managers THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE AND SHOULD BE REPORTED IMMEDIATELY TO THE D D ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHO ES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE CAN CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE C ECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL THEOR SECURITIES AND EXCHANGE COMMISSION. ANCE ANCE GIVEN AFTER THE EFFECTIVE DATE. AN INDICATION The date of this Prospectus is September 04, 2014. i A A REGISTRATION STATEMENT RELATING TO THESE SECURITI OBLIGATION NO OR COMMITMENT OF ANY KIND.PROSP THIS DECLARED EFFECTIVE. NO OFFER TO BUY THE SECURITIES THE REGISTRATION STATEMENT HAS BECOME EFFECTIVE, AN ANY KIND, AT ANY TIME PRIOR TO NOTICE OF ITS ACCEPT Petron Corporation SMC Head Office Complex 40 San Miguel Avenue Mandaluyong City, Philippines Telephone number: (632) 886 3888 Corporate website: www.petron.com This Prospectus relates to the offer and sale of up to [10,000,000] cumulative, non-voting, non- participating, non-convertible peso-denominated Perpetual Preferred Shares Series 2 (the “Preferred Shares” or “Shares”) of Petron Corporation (“Petron”, the “Company” or the “Issuer”), a corporation duly organized and existing under Philippine law. The offer and sale of the Preferred Shares will be by way of a primary Offer (the “Offer”) of [7,000,000] Preferred Shares. In the event of an oversubscription, the Joint Lead Managers, in consultation with the Issuer, reserve the right, but not the obligation, to increase the Offer size up to an additional [3,000,000] Preferred Shares, subject to the registration requirements of the Philippine Securities and Exchange Commission (“SEC”) (the “Oversubscription Option”). The Preferred Shares will be issued on [] (the “Listing Date”) by the Company from its 624,895,503 authorized preferred share capital, out of which 100,000,000 are currently issued and outstanding. Each Preferred Share has a par value of P1.00 and a liquidation right equal to the Offer Price of the Preferred Share plus an amount equal to any dividends declared but unpaid in respect of the previous dividend period and any accrued and unpaid dividends for the then-current dividend period to (and including) the date of commencement of the Company’s winding up or the date of any such other return of capital, as the case may be (the “Liquidation Right”). The Preferred Shares are being offered for subscription solely in the Philippines through the Joint Lead Managers [and Co-Managers] and Selling Agents named herein at a subscription price of [P1,000.00] per share (the “Offer Price”). Following the Offer, the Company will have (a) 9,375,104,497 common shares and (b) [107,000,000] preferred shares issued and outstanding, if the Oversubscription Option is not exercised. On the other hand, if the Oversubscription Option is exercised in full, the Company will have (a) 9,375,104,497 common shares and (b) [110,000,000] preferred shares issued and outstanding. The holders of the Preferred Shares do not have identical rights and privileges with holders of the existing common shares of the Company. The declaration and payment of dividends on the Shares on each Dividend Payment Date will be subject to the sole and absolute discretion of the Issuer’s Board of Directors (the “Board”) to the extent permitted by law, and subject to the covenants (financial or otherwise) in the agreements to which the Company is a party. The declaration and payment of dividends (except stock dividends) do not require any further approval from the shareholders. As and if declared by the Board, dividends on the Preferred Shares shall be at a fixed rate of Series 2A: []% per annum, and Series 2B: [●]% per annum, in all cases calculated in respect of each Share by reference to the Offer Price thereof in respect of each Dividend Period (the “Dividend Rate”). Subject to the limitations described in this Prospectus, dividends on the Shares will be payable quarterly in arrears on [],[],[] and [] of each year (each a “Dividend Payment Date”) being the last day of each 3- month period (a “Dividend Period”) following the relevant Listing Date. Unless the Shares are redeemed by the Issuer on the Optional Redemption Date, the dividends on the Shares will be adjusted on the Optional Redemption Date to the higher of (a) the Dividend Rate or (b) the [] (see “Summary of the Offering” on page 17). Dividends on the Shares will be cumulative. If for any reason the Issuer’s Board does not declare a dividend on the Shares for a dividend period, the Issuer will not pay a dividend on the Dividend Payment Date for the dividend period. However, on any future Dividend Payment Date on which dividends are declared, holders of the Shares must receive the dividends due them on such Dividend Payment Date as ii well as all dividends accrued and unpaid to the holders of the Shares prior to such Dividend Payment Date (see “Description of the Preferred Shares” on page 29). As and if declared by the Board (or the Executive Committee), the Issuer may redeem the Preferred Shares on the [fifth anniversary for Series 2A Preferred Shares or on the seventh anniversary for Series 2B Preferred Shares] from Listing Date (the “Optional Redemption Date”) or on any dividend payment date thereafter, in whole but not in part, at a redemption price equal to the Offer Price of the Shares plus accrued and unpaid dividends for all dividend periods up to the date of actual redemption by the Issuer. The Issuer may purchase the Shares at any time in the open market or by public tender or by private contract at any price through The Philippine Stock Exchange, Inc. (“PSE”). The Shares so purchased may either be redeemed and cancelled after the Optional Redemption Date or kept as treasury shares, as applicable. All payments in respect of the Preferred Shares are to be made free and clear of any deductions or withholding for or on account of any present or future taxes or duties imposed by or on behalf of the Government of the Republic of the Philippines (the “Government”), including, but not limited to, stamp, issue, registration, documentary, value added or any similar tax or other taxes and duties, including interest and penalties. If such taxes or duties are imposed, the Issuer will pay additional amounts so that the holders of Preferred Shares will receive the full amount of the relevant payment which otherwise would have been due and payable, provided, however, that the Issuer shall not be liable for (a) the final withholding tax applicable on dividends earned on the Preferred Shares prescribed under the National Internal Revenue Code of 1997; (b) any income tax, whether or not subject to withholding; (c) expanded value added tax which may be payable by any holder of the Preferred Shares on any amount to be received from the Issuer under the Preferred Shares; and (d) any withholding tax of any amount payable to any holder of the Preferred Shares or any entity which is a non-resident foreign corporation. If payments become subject to additional withholding or any new tax as a result of certain changes in law, rule or regulation, or in the interpretation thereof, and such tax cannot be avoided by use of reasonable measures available to the Issuer, the Issuer having given not more than 60 nor less than 30 days’ notice, may redeem the Shares in whole, but not in part at the Offer Price plus all accrued and unpaid dividends, if any. If an opinion of a recognized accountancy firm authorized to perform auditing services in the Republic of the Philippines has been delivered to the Issuer stating that the Preferred Shares may no longer be recorded as equity in the audited consolidated financial statements of the Issuer prepared in accordance with Philippine Financial Reporting Standards (“PFRS”), or such other accounting standards which succeed PFRS as adopted by the Issuer for the preparation of its audited consolidated financial statements for the relevant financial year, and such event cannot be avoided by use of reasonable measures available to the Issuer even before the Optional Redemption Date, the Issuer having given not more than 60 nor less than 30 days’ notice, may redeem the Preferred Shares in whole, but not in part at the Offer Price plus all accrued and unpaid dividends, if any. (see “Summary of the Offering” on page 17 and “Taxation” on page 143). The Shares will constitute direct and unsecured subordinated obligations of the Issuer ranking at least pari passu in all respects and ratably without preference or priority among themselves with all other Preferred Shares issued by the Issuer. The Shares will rank at all times pari passu with the US$750 million Undated Subordinated Capital Securities of the Company issued in 2013 (“Capital Securities”) and any other Parity Securities issued by the Company (see “Summary of the Offering” on page 17).