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Chan was born and raised in Bacolod City. He started playing basketball for the University of St. La Salle (USLS) in grade school where he competed in various tournaments and earned numerous titles for the school. He was also an erstwhile member of a champion team in the ADIDAS Streetball Challenge in Western Visayas. During his high school years in the USLS, he played in numerous leagues in Bacolod City and was also chosen to be one of the players for Western Visayas to play in the Palarong Pambansa. He then got many playing offers from different schools in Metro Manila where he chose to join the San Beda College training camp. But even before school started, he decided to return to play one last year with the USLS. He then moved to Far Eastern University to play for the Tamaraws where he averaged 18.6 points, 4.8 rebounds, and 3.0 assists per game during his senior year. Upon graduation, Chan was drafted 17th overall by Red Bull in the 2008 PBA draft. After the departure of Cyrus Baguio from the Barako Bull Energy Boosters, Chan became one of the go-to-guys of the team until 2009, when he was traded to the Rain or Shine Elasto Painters. Chan has been compared to 1990s PBA sharpshooter Allan Caidic because of the similarities of their playing styles, both sharing a common first name (Allan) and the similarities of their looks.