UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM N-CSR

                   CERTIFIED SHAREHOLDER REPORT OF REGISTERED
                        MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number                   811-00505
                                    ------------------------------------------

                            Philadelphia Fund, Inc.
------------------------------------------------------------------------------
              (Exact name of registrant as specified in charter)

          1200 North Federal Highway, Suite 424, Boca Raton, FL 33432
------------------------------------------------------------------------------
          (Address of principal executive offices)          (Zip code)

                         Baxter Financial Corporation
          1200 North Federal Highway, Suite 424, Boca Raton, FL 33432
------------------------------------------------------------------------------
                   (Name and address of agent for service)

Registrant's telephone number, including area code: (561) 395-2155
                                                   ---------------------------

Date of fiscal year end:   November 30, 2008
                         -----------------------------------------------------

Date of reporting period:  December 1, 2007 - May 31, 2008
                         -----------------------------------------------------
























<PAGE>

ITEM 1.  REPORTS TO STOCKHOLDERS.

                            PHILADELPHIA FUND, INC.

PRESIDENT'S LETTER - July 3, 2008

Dear shareholders,

   June saw consumer confidence fall to its lowest level in 28 years as high
energy prices reverberated through the economy and housing prices headed down
the basement steps. Last July the consumer confidence index registered a
vibrant 111.9. It has been an eye-watering tumble to June's 50.4 reading.

   The credit crunch, gasoline over $4 per gallon, and declining home prices
have taken a heavy toll on consumers' psyches.

   We have repositioned the portfolio to be better suited to the unfolding
realities of the economy. We increased our holdings of Coca-Cola Company by
adding 50,000 shares. We instituted new investments in Johnson & Johnson with
the acquisition of 30,000 shares, McDonald's Corp. with the acquisition of
40,000 shares, and Wal-Mart Stores, Inc. with the acquisition of 50,000
shares. We acquired 30,000 shares of Wells Fargo & Co. to establish a new
position in that bank.

   On the sell side we eliminated all of our holdings in Anheuser-Busch
Companies, Inc., Bristol-Myers Squibb Company, General Electric Co.,
International Paper Co., and Weyerhaeuser Co. We trimmed our positions in
Chevron Corporation, FirstEnergy Corp., Marathon Oil Corp., and Occidental
Petroleum Corp. by 5,000 shares each and Sempra Energy, Southern Company, and
UnitedHealth Group Inc. by 10,000 shares each. Spectra Energy Corp. was cut
back by 12,400 shares to 50,000 shares. Dow Chemical Co. was reduced by 20,000
shares while Washington Post Co. was cut to 1,000 shares. Deere & Co. was
reduced by 10,000 shares after a 2 for 1 split.

   We have 22.1% of our portfolio in short term instruments, ready to take
advantage of opportunities which we constantly seek.

   We hope the deleveraging of debt in the stock market will be completed in
2009. We would like to remind the reader that down periods in the stock
markets present bargains and that markets anticipate an improved economy
before the economy bottoms.


                                             Very truly yours,
                                             /s/ Donald H. Baxter
                                             Donald H. Baxter
                                             President








<PAGE>
                            PHILADELPHIA FUND, INC.

PORTFOLIO SUMMARY BY INDUSTRY - MAY 31, 2008

                          % of Total                                % of Total
                          Net Assets                                Net Assets
                          ----------                                ----------
Short-Term Corporate Notes   22.1%   Food Processing                    3.6%
Electric Utilities           18.3    Construction/Agriculture Machinery 3.4
Telecommunications            7.6    Chemicals-Diversified              3.4
Banks                         5.8    Restaurants                        3.3
Oil & Gas Operations          5.8    Pharmaceuticals                    2.8
Soft Drinks                   4.8    Natural Gas Utilities              2.0
Personal & Household Products 4.6    Natural Gas Distribution           1.9
Retail Discount               4.0    Health Care Plans                  1.4
Retail Specialty              3.9    Publishing                         0.9
                                                                      -----
                                     Total Investments                 99.6
                                     Other Assets Less Liabilities      0.4
                                                                      -----
                                     Total Net Assets                 100.0%
                                                                      =====

                                       2

<PAGE>
                            PHILADELPHIA FUND, INC.

PORTFOLIO OF INVESTMENTS- MAY 31, 2008

Shares                                                               Value
-------                                                          -------------
                              COMMON STOCKS-77.5%
                                  BANKS-5.8%
 70,000   Bank of America Corp.  . . . . . . . . . . . . . . .   $   2,380,700
 40,000   Wachovia Corp.   . . . . . . . . . . . . . . . . . .         952,000
 30,000   Wells Fargo & Co.  . . . . . . . . . . . . . . . . .         827,100
                                                                 -------------
                                                                     4,159,800
                                                                 -------------
                           CHEMICALS-DIVERSIFIED-3.4%
 60,000   Dow Chemical Co.  . . . . . . . . . . . . . . . . .        2,424,000
                                                                 -------------
                    CONSTRUCTION/AGRICULTURE MACHINERY-3.4%
 30,000   Deere & Co.   . . . . . . . . . . . . . . . . . . .        2,440,200
                                                                 -------------
                           ELECTRIC UTILITIES-18.3%
 30,000   American Electric Power Co., Inc.   . . . . . . . .        1,269,900
124,800   Duke Energy Corp.   . . . . . . . . . . . . . . . .        2,306,304
 25,000   FirstEnergy Corp.   . . . . . . . . . . . . . . . .        1,967,750
 70,000   Progress Energy, Inc.   . . . . . . . . . . . . . .        2,993,200
140,000   TECO Energy, Inc.   . . . . . . . . . . . . . . . .        2,851,800
 50,000   Southern Company  . . . . . . . . . . . . . . . . .        1,810,000
                                                                 -------------
                                                                    13,198,954
                                                                 -------------
                              FOOD PROCESSING-3.6%
 50,000   Kellogg Co.   . . . . . . . . . . . . . . . . . . .        2,590,500
                                                                 -------------
                             HEALTH CARE PLANS-1.4%
 30,000   UnitedHealth Group Inc.   . . . . . . . . . . . . .        1,026,300
                                                                 -------------
                         NATURAL GAS DISTRIBUTION-1.9%
 50,000   Spectra Energy Corp.  . . . . . . . . . . . . . . .        1,351,000
                                                                 -------------
                           NATURAL GAS UTILITIES-2.0%
 25,000   Sempra Energy   . . . . . . . . . . . . . . . . . .        1,445,250
                                                                 -------------
                           OIL & GAS OPERATIONS-5.8%
 15,000   Chevron Corporation . . . . . . . . . . . . . . . .        1,487,250
 25,000   Marathon Oil Corp.  . . . . . . . . . . . . . . . .        1,284,750
 15,000   Occidental Petroleum Corp.  . . . . . . . . . . . .        1,378,950
                                                                 -------------
                                                                     4,150,950
                                                                 -------------
                       PERSONAL & HOUSEHOLD PRODUCTS-4.6%
 50,000   Procter & Gamble Company  . . . . . . . . . . . . .        3,302,500
                                                                 -------------
                              PHARMACEUTICALS-2.8%
 30,000   Johnson & Johnson . . . . . . . . . . . . . . . . .        2,002,200
                                                                 -------------
                                PUBLISHING-0.9%
  1,000   Washington Post Co. Class "B" . . . . . . . . . . .          628,420
                                                                 -------------


Shares                                                               Value
-------                                                          -------------
                               RESTAURANTS-3.3%
 40,000   McDonald's Corp.  . . . . . . . . . . . . . . . . .    $   2,372,800
                                                                 -------------
                              RETAIL DISCOUNT-4.0%
 50,000   Wal-Mart Stores, Inc.   . . . . . . . . . . . . . .        2,887,000
                                                                 -------------
                             RETAIL SPECIALTY-3.9%
 40,000   Costco Wholesale Corp.  . . . . . . . . . . . . . .        2,852,800
                                                                 -------------
                                SOFT DRINKS-4.8%
 60,000   Coca-Cola Company . . . . . . . . . . . . . . . . .        3,435,600
                                                                 -------------
                            TELECOMMUNICATIONS-7.6%
 60,000   AT&T Inc.   . . . . . . . . . . . . . . . . . . . .        2,394,000
 80,000   Verizon Communications Inc.   . . . . . . . . . . .        3,077,600
                                                                 -------------
                                                                     5,471,600
                                                                 -------------
Total Value of Common Stocks (cost $43,406,724) . . . . . . .       55,739,874
                                                                 -------------





Principal
 Amount
---------

                        SHORT-TERM CORPORATE NOTES-22.1%
$2,400M   AIG Funding, Inc.,
           1.826%, due 06/02/2008 . . . . . . . . . . . . . .        2,399,880
 3,000M   General Electric Capital Corp.,
           2.069%, due 06/05/2008 . . . . . . . . . . . . . .        2,999,320
 3,500M   Prudential Funding LLC,
           1.876%, due 06/02/2008 . . . . . . . . . . . . . .        3,499,820
 3,500M   Toyota Motors Credit Corp.,
           2.079%, due 06/05/2008 . . . . . . . . . . . . . .        3,499,203
 3,500M   U.S. Bancorp,
           1.851%, due 06/02/2008 . . . . . . . . . . . . . .        3,500,000
                                                                 -------------
Total Value of Short-Term Notes (cost $15,898,223)  . . . . .       15,898,223
                                                                 -------------

Total Value of Investments (cost 59,304,947)# . . . . .  99.6%      71,638,097

Other Assets Less Liabilities . . . . . . . . . . . . .   0.4          256,343
                                                        -----    -------------
Net Assets  . . . . . . . . . . . . . . . . . . . . . . 100.0%   $  71,894,440
                                                        =====    =============
# Aggregate cost for tax purposes is $59,304,947.


                       See notes to financial statements

                                       3

<PAGE>
                            PHILADELPHIA FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES - MAY 31, 2008

ASSETS
   Investments in securities, at value
    (identified cost $59,304,947) (Note 1A) . . . . .            $ 71,638,097
   Cash . . . . . . . . . . . . . . . . . . . . . . .                 170,286
   Dividends and interest receivable  . . . . . . . .                 169,231
   Other assets . . . . . . . . . . . . . . . . . . .                  10,410
                                                                 ------------
         Total Assets . . . . . . . . . . . . . . . .              71,988,024

LIABILITIES
   Payables:
      Capital shares redeemed . . . . . . . . . . . . $   619
   Accrued advisory, administrative and 12b-1 fees  .  69,490
   Other accrued expenses . . . . . . . . . . . . . .  23,475
                                                      -------
         Total Liabilities  . . . . . . . . . . . . .                  93,584
                                                                 ------------

NET ASSETS  . . . . . . . . . . . . . . . . . . . . .            $ 71,894,440
                                                                 ============

NET ASSETS CONSIST OF:
   Capital paid-in  . . . . . . . . . . . . . . . . .            $ 58,934,769
   Undistributed net investment income  . . . . . . .                 213,442
   Accumulated net realized gain on investments . . .                 413,079
   Net unrealized appreciation in value of
    investments . . . . . . . . . . . . . . . . . . .              12,333,150
                                                                 ------------

NET ASSETS for 11,616,407 shares outstanding  . . . .            $ 71,894,440
                                                                 ============

NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
 PER SHARE ($71,894,440 / 11,616,407 shares)  . . . .                   $6.19
                                                                        =====


                       See notes to financial statements

                                       4

<PAGE>
                             PHILADELPHIA FUND, INC.

STATEMENT OF OPERATIONS - SIX MONTHS ENDED MAY 31, 2008

INVESTMENT INCOME
   Dividends . . . . . . . . . . . . . . . . . $ 1,010,889
   Interest  . . . . . . . . . . . . . . . . .     153,538
                                               -----------
      Total Income . . . . . . . . . . . . . .                    $ 1,164,427

EXPENSES:
   Investment advisory fee . . . . . . . . . .     278,847
   Administrative fee  . . . . . . . . . . . .      92,949
   Distribution plan expenses  . . . . . . . .      55,769
   Professional fees . . . . . . . . . . . . .      40,191
   Director fees and expenses  . . . . . . . .      26,807
   Transfer agent and dividend disbursing
    agent's fees and expenses  . . . . . . . .      19,502
   Fund accounting agent's fees  . . . . . . .      18,694
   Custodian fees  . . . . . . . . . . . . . .      13,484
   Chief compliance officer fees . . . . . . .       8,267
   Registration expenses . . . . . . . . . . .       7,270
   Insurance expense . . . . . . . . . . . . .       6,925
   Other expenses  . . . . . . . . . . . . . .      18,084
                                               -----------

      Total Expenses . . . . . . . . . . . . .     586,789
      Less: Fees paid indirectly . . . . . . .       2,192
                                               -----------
      Net Expenses . . . . . . . . . . . . . .                        584,597
                                                                 ------------
      Net Investment Income  . . . . . . . . .                        579,830



REALIZED AND UNREALIZED GAIN (LOSS) ON
 INVESTMENTS:
   Net realized gain on investments  . . . . .     416,001
   Net unrealized depreciation of
    investments  . . . . . . . . . . . . . . .  (6,853,684)
                                               -----------
      Net loss on investments  . . . . . . . .                     (6,437,683)
                                                                 ------------

NET DECREASE IN NET ASSETS RESULTING FROM
 OPERATIONS  . . . . . . . . . . . . . . . . .                   $ (5,857,853)
                                                                 ============

                        See notes to financial statements

                                        5
<PAGE>
                             PHILADELPHIA FUND, INC.

STATEMENT OF CHANGES IN NET ASSETS
                                                   Six Months
                                                      Ended       Year Ended
                                                     May 31,     November 30,
                                                      2008           2007
                                                  -------------  ------------
INCREASE (DECREASE) IN NET ASSETS:
   OPERATIONS
      Investment income-net . . . . . . . . . . . $     579,830  $  1,316,324
      Net realized gain on investments  . . . . .       416,001    14,925,339
      Net unrealized depreciation of investments.    (6,853,684)   (9,250,664)
                                                  -------------  ------------
         Net increase (decrease) in net assets
          resulting from operations . . . . . . .    (5,857,853)    6,990,999

   DISTRIBUTIONS TO SHAREHOLDERS
      Net investment income ($0.065 and $0.152
       per share, respectively) . . . . . . . . .      (719,089)   (1,627,930)
      Net realized gain on investments ($1.456
       and $0.285 per share, respectively)  . . .   (14,917,477)   (3,054,151)

   CAPITAL SHARE TRANSACTIONS
      Increase (decrease) in net assets
       resulting from capital share transactions
       (Note 2) . . . . . . . . . . . . . . . . .     9,165,123    (3,967,968)
                                                  -------------  ------------

         Net decrease in net assets . . . . . . .   (12,329,296)   (1,659,050)

NET ASSETS
      Beginning of year . . . . . . . . . . . . .    84,223,736    85,882,786
                                                  -------------  ------------
      End of period (including undistributed net
       investment income of $213,442 and
       $352,701, respectively)  . . . . . . . . . $  71,894,440  $ 84,223,736
                                                  =============  ============

                       See notes to financial statements

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES
   Philadelphia Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 as a diversified open-end management investment company.
The Fund's investment objective is to achieve long-term growth of capital and
income. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.

   A. Security Valuation - securities listed on national exchanges are valued
at the closing sales price while securities trading on the NASDAQ National
Market are valued at the NASDAQ Official Closing Price. If market quotations
are not readily available, securities will be valued at their fair values as
determined in accordance with procedures approved by the Board of Directors.
Short-term obligations acquired at par are stated at cost which, when combined
with interest receivable, approximates fair value. Short-term obligations
acquired at a discount are stated at amortized cost which approximates fair
value.

   Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below:

   [Bullet] Level 1 - quoted prices in active markets for identical
                      securities,

   [Bullet] Level 2 - other significant observable inputs (including quoted
                      prices for similar securities, interest rates,
                      prepayment speeds, credit risk, etc.), and

   [Bullet] Level 3 - significant unobservable inputs (including the Fund's
                      own assumptions in determining the fair value of
                      investments)


                                       6

<PAGE>

                            PHILADELPHIA FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

   The inputs or methodology used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities. For
example, short-term securities with maturities of 60 days or less are valued
at amortized cost, in accordance with rules under the Investment Company Act
of 1940.  Generally, amortized cost approximates the current fair value of a
security, but since the value is not obtained from a quoted price in an active
market, such securities are reflected as Level 2.

   The following is a summary of the inputs used to value the Fund's net
assets as of May 31, 2008:



   Valuation Inputs                                Investments in Securities
   ----------------                                -------------------------
   Level 1 - Quoted prices . . . . . . . . . . . .        $55,739,874
   Level 2 - Other significant observable inputs .         15,898,223
   Level 3 - Significant unobservable inputs . . .                ---
                                                          -----------
   Total . . . . . . . . . . . . . . . . . . . . .        $71,638,097
                                                          ===========

   B. Federal Income Taxes - no provision has been made for Federal income
taxes on net income or capital gains, since it is the policy of the Fund to
continue to comply with the special provisions of the Internal Revenue
Code applicable to investment companies and to make sufficient distributions
of income and capital gains to relieve the Fund from all, or substantially
all, such taxes.

   C. Distributions to Shareholders - the Fund distributes its net investment
income quarterly and net realized gains annually. Income and capital gain
distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. For the six
months ended May 31, 2008 and the year ended November 30, 2007, there were no
differences between book and tax basis distributions.

   D. Use of Estimates - the preparation of the financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual amounts could differ from those estimates.

   E. Other - the Fund records security transactions on the trade date.
Dividend income is recognized on the ex-dividend date. Interest income is
recognized on the accrual basis and includes accretion of discounts.
Estimated expenses are accrued daily.

   The Fund indemnifies its officers and directors for certain liabilities
that might arise from the performance of their duties to the Fund.
Additionally, in the normal course of business, the Fund enters into contracts
that contain a variety of representations and warranties and which provide
general indemnification. The Fund's maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Fund and/or its affiliates that have not yet occurred. However, based on
experience, the Fund expects the risk of loss to be remote.

2. CAPITAL STOCK
   As of May 31, 2008, 30,000,000 shares of $1.00 par value capital stock were
authorized. Transactions in shares of capital stock were as follows:










                               Six Months Ended             Year Ended
                                 May 31, 2008            November 30, 2007
                           ------------------------    ----------------------
                             Shares       Amount         Shares     Amount
                           ----------   -----------    ---------  -----------
Shares sold . . . . . . . .    51,509   $   207,482       81,756  $   654,380
Shares issued in
 Reinvestment of
 distributions  . . . . . . 1,963,811    13,159,893      487,134    3,824,136
Shares redeemed . . . . . .  (687,238)   (4,202,252)  (1,054,579)  (8,446,484)
                           ----------   -----------    ---------  -----------
Net increase (decrease) . . 1,328,082   $ 9,165,123    (485,689)  $(3,967,968)
                           ==========   ===========    =========  ===========

                                       7

<PAGE>
                            PHILADELPHIA FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

3. INVESTMENT ADVISORY AND OTHER TRANSACTIONS WITH AFFILIATES
   Baxter Financial Corporation (BFC) is the investment advisor and the
administrator of the Fund. Certain officers and a director of the Fund are
also officers and a director of BFC.

   As investment advisor, BFC supervises the Fund's investments on a
continuous basis and provides the Fund with investment advice and
recommendations for an annual fee equal to .75% of the first $200 million of
net assets, .625% of net assets between $200 million and $400 million, and
..50% of net assets in excess of $400 million.

   As the Fund's administrator, BFC is responsible for providing overall
supervision of the Fund's administrative operations and receives an annual fee
of .25% of the average net assets of the Fund.

   Both the investment advisory fee and the administrative fee are payable
monthly, based on month-end net asset values of the Fund.

   During the six months ended May 31, 2008, directors of the Fund who are not
affiliated with BFC received directors' fees aggregating $19,550. The Fund's
custodian provided credits in the amount of $2,192 against custodian charges
based on the uninvested cash balances of the Fund. A director and former
officer of the Fund received a monthly pension from the Fund which amounted to
$6,250 for the above six-month period.

   The Fund's Chief Compliance Officer (CCO) is also an employee of BFC, and a
Vice President of the Fund. For the six-month period ending May 31, 2008, the
Fund's CCO salary expense amounted to $8,267.

4. INVESTMENT TRANSACTIONS
   For the six months ended May 31, 2008, purchases and sales of securities
(other than U.S. Government obligations and short-term notes) aggregated
$19,054,659 and $23,111,880, respectively. The specific identification method
is used to determine tax cost basis when calculating realized gains and
losses.

5. DISTRIBUTION PLAN
   Pursuant to an amended Distribution Plan adopted under rule 12b-1 of the
Investment Company Act of 1940, the Fund may pay a fee in an amount up to .5%
of the Fund's average net assets calculated monthly. A component of the 12b-1
fee (.25% of the Fund's average net assets) is paid to BFC for providing
shareholder services, which include advice and information regarding: share
accounts; applications; use of the prototype retirement plans of the Fund;
assistance with questions regarding the Fund's transfer agent, as well as
other information and services. At its discretion, BFC may make payments to
registered broker-dealers and members of the Financial Industry Regulatory
Authority ("FINRA") for providing Fund shareholders with similar services.

   The remainder of the 12b-1 fee may be used to pay brokers and dealers which
enter into agreements with BFC or which provide sales, promotional, or
advertising services to the Fund, and to pay for other distribution,
advertising, registration and promotional expenses associated with the sale of
Fund shares.

   Until further notice, BFC has agreed to reduce the Fund's 12b-1 fees to
..15% of the Fund's average net assets.

6. TAX COMPONENTS OF NET ASSETS
   The Fund's tax-basis capital gains and losses are determined only at the
end of each fiscal year.

   As of November 30, 2007, the components of net assets on a tax basis were
as follows:

   Undistributed income . . . . . . . . . . . . . . . . . .  $   352,701
   Undistributed long-term gain . . . . . . . . . . . . . .   14,914,555
   Gross unrealized appreciation  . . . . . . . . . . . . .   19,256,370
   Gross unrealized depreciation  . . . . . . . . . . . . .      (69,536)
   Capital paid-in  . . . . . . . . . . . . . . . . . . . .   49,769,646
                                                             -----------
      Total . . . . . . . . . . . . . . . . . . . . . . . .  $84,223,736
                                                             ===========

                                       8

<PAGE>

                            PHILADELPHIA FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

   At May 31, 2008, net unrealized appreciation of investment securities for
tax purposes was $12,333,150 consisting of $13,442,118 gross unrealized
appreciation and $1,108,968 gross unrealized depreciation.

   In July 2006, the Financial Accounting Standards Board issued
interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income
Taxes". FIN 48 prescribes the minimum recognition threshold a tax
position must meet in connection with accounting for uncertainties in income
tax positions taken or expected to be taken by an entity, including mutual
funds, before being measured and recognized in the financial statements.
Adoption of FIN 48 is required for fiscal years beginning after December 15,
2006 and is to be applied to all open years as of the effective date.

   Recent Securities and Exchange Commission guidance allows implementing FIN
48 in the Fund's net asset calculations as late as the Fund's last net asset
value calculation in the first required financial statement reporting period.
As a result, the Fund implemented FIN 48 on May 31, 2008. Based on
management's analysis, the adoption of FIN 48 did not have a material impact
on the financial statements.

                              FINANCIAL HIGHLIGHTS
        (For a Share of Capital Stock Outstanding Throughout Each Period)
<TABLE>
<CAPTION>

                                    Six Months         Year Ended November 30,
                                      Ended      --------------------------------------
SELECTED PER-SHARE DATA            May 31, 2008   2007    2006    2005    2004    2003
-----------------------            ------------  ------  ------  ------  ------  ------
<S>                                <C>           <C>     <C>     <C>     <C>     <C>
Net Asset Value,
 Beginning of Period . . . . . . .    $ 8.19     $ 7.97  $ 8.03  $ 7.80  $ 6.51  $ 6.06
                                      ------     ------  ------  ------  ------  ------

INCOME FROM INVESTMENT OPERATIONS
Net Investment Income  . . . . . .      0.05       0.12    0.15    0.13    0.11    0.12
Net Realized and Unrealized
 Gain (Loss) on Investments  . . .     (0.52)      0.54    0.70    0.59    1.39    0.62
                                      ------     ------  ------  ------  ------  ------
Total From Investment Operations .     (0.47)      0.66    0.85    0.72    1.50    0.74
                                      ------     ------  ------  ------  ------  ------
LESS DISTRIBUTIONS FROM:
Net Investment Income  . . . . . .      0.07       0.15    0.13    0.11    0.13    0.12
Net Realized Gains . . . . . . . .      1.46       0.29    0.78    0.38    0.08    0.17
                                      ------     ------  ------  ------  ------  ------
Total Distributions  . . . . . . .      1.53       0.44    0.91    0.49    0.21    0.29
                                      ------     ------  ------  ------  ------  ------
Net Asset Value, End of Period . .    $ 6.19     $ 8.19  $ 7.97  $ 8.03  $ 7.80  $ 6.51
                                      ======     ======  ======  ======  ======  ======

TOTAL RETURN (%) . . . . . . . . .     (7.19)**    8.54   11.74    9.59   23.43   12.78
------------

RATIOS/SUPPLEMENTAL DATA
------------------------
Net Assets,
 End of Period (in thousands). . .   $71,894     $84,224 $85,883 $85,984 $84,875 $74,129

Ratio to Average Net Assets:
  Expenses (%) . . . . . . . . . .      1.58(a)     1.50    1.49    1.52    1.52    1.54
  Net Investment Income (%)  . . .      1.56(a)     1.54    1.96    1.64    1.56    1.99

Portfolio Turnover Rate (%)  . . .        30**        59      33      26      44      52
</TABLE>

(a) Annualized
** Not annualized

                       See notes to financial statements

                                       9
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of
Directors of Philadelphia Fund, Inc.

We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments of Philadelphia Fund, Inc., as of May
31, 2008, and the related statement of operations for the six months then
ended, the statements of changes in net assets for the six months
ended May 31, 2008 and the year ended November 30, 2007 and financial
highlights for each of the five and one-half year periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of May 31, 2008, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Philadelphia Fund, Inc., at May 31, 2008, the results of its operations, the
changes in its net assets and its financial highlights for each of the periods
presented, in conformity with accounting principles generally accepted in the
United States of America.

   BRIGGS, BUNTING & DOUGHERTY, LLP

Philadelphia, Pennsylvania
July 11, 2008

                                       10
<PAGE>
                            PHILADELPHIA FUND, INC.
                                  (Unaudited)

INFORMATION ABOUT YOUR FUND'S EXPENSES - For the six months ended May 31,
2008.

As a shareholder of the Fund, you incur ongoing costs, including management
fees and other Fund expenses. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the Fund and to compare these
costs with ongoing costs of investing in other mutual funds. The example is
based on an investment of $1,000 made at the beginning of the period and held
for the entire semi-annual period, December 1, 2007 through May 31, 2008.
This table illustrates the Fund's costs in two ways:

ACTUAL FUND RETURN: This section helps you to estimate the actual expenses
that you paid over the period. The "Ending Account Value" shown is derived
from the Fund's actual return for the past six month period, the "Expense
Ratio" column shows the period's annualized expense ratio, and the "Expenses
Paid During Period" column shows the dollar amount that would have been
paid by an investor who started with $1,000 in the Fund at the beginning of
the period. You may use the information here, together with your account
value, to estimate the expenses that you paid over the period. To do so,
simply divide your account value by $1,000 (for example, an $8,600 account
value divided by $1,000 = 8.6), then multiply the result by the number given
for the Fund in the first line under the heading entitled "Expenses Paid
During Period."

HYPOTHETICAL 5% RETURN: This section is intended to help you compare the
Fund's costs with those of other mutual funds. It assumes that the Fund had an
annual return of 5% before expenses, but that the expense ratio is unchanged.
In this case, because the return used is not the Fund's actual return, the
results do not apply to your investment. This example is useful in
making comparisons to other mutual funds because the Securities and Exchange
Commission requires all mutual funds to provide examples of expenses
calculated and based on an assumed 5% annual return. You can assess the Fund's
costs by comparing this hypothetical example with the hypothetical examples
that appear in shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight and
help you compare your ongoing costs only and do not reflect any transactional
costs such as sales charges (loads), redemption fees, or exchange fees. The
Philadelphia Fund does not charge any sales loads, redemption fees, or
exchange fees, but these fees may be present in other funds to which you
compare the Fund. Therefore, the hypothetical portions of the table are useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds.

                         BEGINNING       ENDING
                       ACCOUNT VALUE  ACCOUNT VALUE   EXPENSE   EXPENSES PAID
                         12/01/07       05/31/08       RATIO    DURING PERIOD#
                       -------------  -------------   -------   --------------


Actual Fund Return*  . .    $1,000       $ 928.12      1.58%(a)      $7.62

Hypothetical 5% Return .    $1,000       $1,017.10     1.58%(a)      $7.97

 * The actual total return for the six-month period ended May 31, 2008 was
   -7.19%. The actual total return figure assumes the reinvestment of all
   dividends and capital gain distributions, if any.
 # Expenses are equal to the Fund's annualized expense ratio multiplied by
   the average account value over the period, multiplied by the number of
   days in the most recent fiscal half-year, then divided by 366.
(a)Annualized.

                                      11

<PAGE>
                            PHILADELPHIA FUND, INC.
                                  (Unaudited)

REVIEW AND APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT

When making its decision to renew the Fund's Investment Advisory Agreement
(the "Advisory Agreement") with Baxter Financial Corporation ("BFC" or the
"Advisor"), the Board of Directors (the "Board") carefully considered a
variety of materials, which the Directors had received prior to the Board
meeting held on March 10, 2008 and March 31, 2008 (which meeting specifically
had been called to consider the renewal of the Advisory Agreement). At the
Board meeting, BFC provided detailed responses to a series of questions
contained in a letter from the Fund's independent legal counsel, submitted on
behalf of the Directors who are not "interested persons" (as that term is
defined in the Investment Company Act of 1940 (the "1940 Act")) (the
"Independent Directors"), requesting information for the Board's consideration
of the continuation of the Advisory Agreement (the "Information Request
Letter").

The Information Request Letter had asked BFC to provide responses to a series
of questions relating to the following categories of information: a
description of the Advisor's business, the Advisor's personnel and operations,
the services that the Advisor provides to the Fund, the compensation payable
to the Advisor for the services provided to the Fund, comparative
performance information (relating to the Fund and the Advisor), expenses of
the Fund, the Fund's and the Advisor's compliance policies and procedures, and
certain other relevant information. The Board thoroughly reviewed all of the
responses provided by BFC to the questions in each of these categories,
including performance statistics, index comparisons and expense comparisons.
The Board compared the Fund's performance to the performance of the S&P 500
Index, the Fund's benchmark, as well as the S&P/Citigroup Value Index; Russell
1000 Index, Russell 1000 Value Index, Wilshire 5000, and Dow Jones Wilshire
Large-Cap Value Index. The Board also compared the Fund with the average
Morningstar star rating, Morningstar risk and Morningstar returns of
other funds with a growth and income objective listed in the Morningstar Large
Value Category.

The Board compared the Fund's management related, non-management related, and
total expense ratios to those of other funds with total net assets between $50
million and $100 million contained in Lipper's Growth and Income Category. The
Board also took into account information furnished by BFC throughout the year
at quarterly Board meetings, as well as the information specifically
furnished to respond to the Information Request Letter. Information provided
throughout the year included reports on the Fund's investment performance,
expenses, portfolio composition and turnover, and sales and redemptions, along
with related financial statements, and information about the scope and quality
of services provided by BFC (as the Fund's investment advisor, principal
underwriter and administrator). The Board also had received periodic reports
relating to compliance with the Fund's investment policies and restrictions
and compliance policies, and various information on regulatory issues relating
to the investment company industry.

When considering the continuation of BFC as the Fund's investment advisor and
the approval of the Advisory Agreement, the Board discussed the following
specific factors:

[Bullet] the nature, extent and quality of the services provided by BFC;

[Bullet] the investment performance of the Fund and of BFC;

[Bullet] the Advisor's cost of providing the services to the Fund, the
         profitability of managing the Fund to BFC, and any ancillary benefits
         that BFC may enjoy as a result of the Advisor's relationship with
         the Fund; and

[Bullet] whether the Fund would realize any economies of scale as the Fund
         grows larger, and the breakpoints included in the Advisory Agreement
         that allow shareholders to participate in the resulting benefits.

                                       12

<PAGE>
                            PHILADELPHIA FUND, INC.
                                  (Unaudited)

REVIEW AND APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT (Continued)

In considering the materials described above, the Independent Directors
referred to the memorandum from their independent legal counsel, Stradley
Ronon Stevens & Young, LLP. The memorandum discussed the provisions of the
1940 Act applicable to the continuation of the Advisory Agreement, and
outlined the Board's responsibilities when considering the renewal of the
Agreement. The Board noted that: (i) Section 15(c) of the 1940 Act requires
the Board to request and evaluate, and BFC to furnish, such information as may
reasonably be necessary to evaluate the terms of the Advisory Agreement, and
(ii) BFC's responses to the Information Request Letter were intended to assist
the Board in meeting these requirements.

In its deliberations, the Board took into account a combination of factors,
including the following:

   Nature, Extent and Quality of Services
   --------------------------------------
   In considering the nature, extent and quality of advisory services provided
   by the Advisor, consideration was given by the Board to the qualifications
   of Donald Baxter, the Fund's portfolio manager. Also, the Board considered
   how BFC had performed its research and management processes, and the
   Advisor's record of compliance with the Fund's investment policies and
   restrictions, as well as compliance with the Fund's compliance policies and
   procedures and the code of ethics that governs personal securities trading
   by Fund management. The Board evaluated the Advisor's portfolio management
   process.  The Board also evaluated how BFC performed its oversight
   responsibilities with respect to the Fund's custodian, transfer agent, fund
   accounting and shareholder services agents. The Board concluded that the
   Advisor had provided competent supervision, regulatory compliance services,
   portfolio oversight services, and reporting functions to the Fund. The
   Board concluded that the scope and quality of advisory services provided by
   BFC were consistent with the Fund's operational requirements, and
   shareholders of the Fund had received reasonable value in return for the
   fees paid to BFC.

   Investment Performance of the Fund and the Advisor
   --------------------------------------------------
   In evaluating performance, attention was given to both short-term and
   long-term performance of the Fund in comparison with the Fund's benchmark
   and other relevant indexes, as well as the performance of the Fund's peer
   group, and to the Fund's compliance with its specific investment objective
   and investment restrictions. The Board also discussed how the Fund's
   portfolio composition impacted its performance, given the challenging
   market and economic conditions existing over the prior year. The Board
   indicated its satisfaction with the Fund's returns, relative to the
   relevant indexes and the Fund's peer group. The Board concluded that the
   Fund's investment performance was competitive, relative to both the
   relevant market indexes and the Fund's peer group. The Board also concluded
   that it was satisfied with the Advisor's performance.

   Costs of Providing Services
   ---------------------------
   In considering the costs of BFC's providing advisory services and the
   reasonableness of the Fund's expenses, the Board considered the advisory
   fee schedule and the fact that breakpoints were included in the schedule.
   The Board evaluated both the Advisor's fee schedule and its breakpoints
   against the fee schedules of other investment companies in

                                       13

<PAGE>
                            PHILADELPHIA FUND, INC.
                                  (Unaudited)

REVIEW AND APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT (Continued)

   the Fund's peer group. Emphasis was placed on the Fund's total expense
   ratio, management-related expenses and non-management-related expenses,
   compared with the averages reported for the Fund's peer group. The
   Independent Directors also considered the benefits to BFC of providing
   various other services to the Fund, such as administration and distribution
   services, under separate agreements between the Fund and BFC. The Board
   concluded that BFC's fees were reasonable, in light of the nature, extent,
   and quality of services provided to the Fund, and the costs of the services
   provided by BFC, as well as the fees charged by other non-affiliated
   advisers offering comparable services to similar mutual funds.

   The Advisor's Profitability
   ---------------------------
   The Independent Directors considered BFC's level of profitability in
   providing investment management services to the Fund, Eagle Growth Shares,
   Inc., and certain private clients. The materials prepared to respond to the
   Information Request Letter reflected that BFC did not manage other
   registered investment companies (other than Eagle Growth Shares, Inc.),
   pooled investment vehicles or separate accounts. In evaluating the
   Advisor's profitability in managing Fund, the Independent Directors
   reviewed BFC's 2007 and 2006 financial statements. The Board also
   considered the extent to which BFC may potentially achieve economies of
   scale and possibly derive other ancillary benefits from Fund operations,
   including the allocation of Fund brokerage and the use of the Fund's soft
   dollars to pay for research and other similar services. The Board
   determined that there was no need to implement alternative fee schedules at
   this time. The Board noted that the increased costs of providing advisory
   services will, in the long term, serve to reduce the Advisor's
   profitability. The Board concluded that BFC's profitability, in managing
   the Fund, based on the services provided, and when measured against
   profitability in prior years of managing the Fund, as well as the Advisor's
   profitability in managing another investment company, was reasonable and
   not excessive.

   Economies of Scale
   ------------------
   The Board analyzed the Advisor's fee schedule and the breakpoints in the
   fee schedule against the fee schedules of other investment companies in the
   Fund's peer group. The Board concluded that economies of scale would be
   realized as the Fund's assets increased, and noted the fact that BFC's
   advisory fee schedule was designed to allow the Fund's shareholders to
   participate in the benefits of these economies of scale (i.e., the
   Advisor's fees would be reduced), once certain asset levels were met. The
   Board noted that it will continue to review the availability of such
   economies of scale.

Based on the foregoing considerations and the overall quality and experience
of BFC's personnel and operations, and investment advisory capabilities of the
Advisor, the Board determined that the continuation of the Advisory Agreement
was in the best interests of the Fund. The Independent Directors met
separately, without management being present, to consider the renewal of the
Advisory Agreement. After full consideration of the factors discussed above,
with no single factor identified as being of paramount or controlling
importance, the Board, including a majority of the Independent Directors,
approved the renewal of the Advisory Agreement.

                                       14






<PAGE>
                            PHILADELPHIA FUND, INC.

OFFICERS
DONALD H. BAXTER, Chairman and President
RONALD F. ROHE, Vice President/Secretary/Treasurer
KEITH A. EDELMAN, Vice President/Chief Compliance Officer
DIANE M. SARRO, Vice President/Director of Shareholder Services


DIRECTORS
DONALD H. BAXTER
THOMAS J. FLAHERTY
KENNETH W. MCARTHUR
ROBERT L. MEYER
DONALD P. PARSON


PHILADELPHIA FUND, INC.
1200 North Federal Highway, Suite 424, Boca Raton, FL 33432 (561) 395-2155


INVESTMENT ADVISOR, ADMINISTRATOR AND UNDERWRITER
BAXTER FINANCIAL CORP., member FINRA
1200 North Federal Highway, Suite 424, Boca Raton, FL 33432


CUSTODIAN
U.S. BANK, N.A., 425 Walnut Street, Cincinnati, OH 45202


TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND FUND ACCOUNTING AGENT
UNIFIED FUND SERVICES, INC.
P.O. Box 6110, Indianapolis, IN 46206-6110


LEGAL COUNSEL
STRADLEY, RONON, STEVENS & YOUNG, LLP Philadelphia, PA


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BRIGGS, BUNTING & DOUGHERTY, LLP Philadelphia, PA

                                      15













<PAGE>


        Philadelphia Fund, Inc.                        PHILADELPHIA
        1200 North Federal Highway                      FUND, INC.
[LOGO]  Suite 424
        Boca Raton, FL 33432                            SEMI-ANNUAL
        (561) 395-2155                                    REPORT
                                                        May 31, 2008


The Fund files its complete schedule
of portfolio holdings with the
Securities and Exchange Commission
(SEC) for the first and third
quarters of each fiscal year on Form
N-Q. The Fund's Forms N-Q are available
on the SEC's website at
http://www.sec.gov, by calling the
Fund at 1-800-749-9933, and may be
reviewed and copied at the SEC's
Public Reference Room. Information on
the operation of the SEC's Public
Reference Room may be obtained by
calling 1-800-SEC-0300.


The Fund's proxy voting policies and
procedures and how the Fund voted
proxies relating to portfolio
securities during the most
recent 12-month period ended
June 30, 2008 are available without
charge (i) upon request, by calling
1-800-749-9933; (ii) by writing to the
Fund at the above address; and (iii) on
the SEC's website at www.sec.gov.


                                                     Established 1923
You will find important information
about PHILADELPHIA FUND - its
investment policies and management, past
record and the method of calculating
the per-share net asset value - in the
current prospectus. This report is
submitted for the general information
of the Fund's shareholders. It is not
authorized for distribution to
prospective investors unless preceded
or accompanied by an effective prospectus.






<PAGE>

ITEM 2.  CODE OF ETHICS.


         Not applicable for filing of Semi-Annual Reports to Shareholders.

         The registrant's Code Of Business Ethics for Principal Executive
         and Financial Officers is available, without charge, upon request,
         by writing to the above address, or by calling 1-800-749-9933.


ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT.


         Not applicable for filing of Semi-Annual Reports to Shareholders.


ITEM 4.  PRINCIPAL ACCOUNTANT FEES AND SERVICES


         Not applicable for filing of Semi-Annual Reports to Shareholders.


ITEM 5.  AUDIT COMMITTEE OF LISTED REGISTRANTS.

         Not applicable to registrant, which is an open-end management
         investment company.


ITEM 6.  SCHEDULE OF INVESTMENTS.

         Not applicable; full Schedule of Investments filed under Item 1 of
         this report.


ITEM 7.  DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
         MANAGEMENT INVESTMENT COMPANIES.

         Not applicable to registrant, which is an open-end management
         investment company.


ITEM 8.  PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

         Not applicable to registrant, which is an open-end management
         investment company.


ITEM 9.  PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
         COMPANY AND AFFILIATED PURCHASERS.

         Not applicable to registrant, which is an open-end management
         investment company.



<PAGE>
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         There were no changes to the procedures by which shareholders may
         recommend nominees to the registrant's board of directors during
         the reporting period.


ITEM 11. CONTROLS AND PROCEDURES.

        (a) The registrant's principal executive officer and principal
            financial officer have evaluated the registrant's disclosure
            controls and procedures (the "Procedures") within 90 days of the
            filing of this report, and have concluded that the Procedures are
            effective in providing reasonable assurances that the information
            required to be disclosed by the registrant in its reports or
            statements filed under the Securities Exchange Act of 1934 is
            recorded, processed, summarized and reported within the time
            periods specified in the rules and forms of the Securities and
            Exchange Commission.

        (b) There were no changes in the registrant's internal control over
            financial reporting (as defined in Rule 30a-3(d) under the
            Investment Company Act of 1940, as amended) that occurred during
            the second fiscal quarter of the period covered by this report
            that have materially affected, or are reasonably likely to
            materially affect, the registrant's internal control over
            financial reporting.


ITEM 12. EXHIBITS.

        (a)(1) Not applicable for filing of Semi-Annual Reports to
               Shareholders.

           (2) The certifications required by Rule 30a-2(a) under the
               Investment Company Act of 1940, as amended, and Sections 302
               and 906 of the Sarbanes-Oxley Act of 2002 are attached as
               exhibits hereto.


















<PAGE>

                                  SIGNATURES


 Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

(Registrant) Philadelphia Fund, Inc.
 --------------------------------------------------------------------

By (Signature and Title)* /s/ Donald H Baxter
 -------------------------------------------------------
  Donald H. Baxter, Chief Executive Officer

Date  July 22, 2008
 ---------------------

 Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

By (Signature and Title)* /s/ Donald H. Baxter
 -------------------------------------------------------
  Donald H. Baxter, Chief Executive Officer

Date  July 22, 2008
 ---------------------

By (Signature and Title)* /s/ Ronald F. Rohe
 -------------------------------------------------------
  Ronald F. Rohe, Chief Financial Officer

Date  July 22, 2008
 ---------------------

* Print the name and title of each signing officer under his or her signature.