Treaty (19 January 1955)

January 19, 1955

EXCHANGE OF NOTES CONSTITUTING AN AGREEMENT

BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE

UNITED STATES OF AMERICA RELATING TO GUARANTIES

UNDER SECTION HI (B) (3) OF THE ECONOMIC

COOPERATION ACT OF 1948, AS AMENDED

Note: The Agreement entered into force, January 19, 1955.

Reference: This Agreement is also published in 241 UNTS, p. 514.

I

THE AMERICAN AMBASSADOR TO THE PHILIPPINE SECRETARY OF

FOREIGN AFFAIRS

AMERICAN EMBASSY

No. 0453 Manila, October 4, 1954

Excellency:

I have the honor to refer to the agreement between the United States of America and

the Republic of the Philippines effected by an exchange of notes dated February 18

and 19, 1952, relating to guaranties authorized by Section III (b) (3) of the

Economic Cooperation Act of 1948, as amended. I also have the honor to refer to

recent conversations between representatives of our two Governments on the same

subject and to confirm the understandings shall be modified as follows:

1. The Government of the Philippines and of the United States of

America will, upon the request of either of them, consult respecting

projects in the Philippines proposed by nationals of the United States of

America with regard to which guaranties under Section III (b) (3) of the

Economic Cooperation Act of 1948, as heretofore amended, have been

made or are under consideration. With respect to such guaranties

extending to projects which are approved by the Government of the

Philippines in accordance with the provisions of the aforesaid Section,

the Government of the Philippines agrees:

A. That informational media guaranties covered by this agreement shall be limited to

transactions involving books, including textbooks, periodicals, and newspapers, and

such other informational media as may hereafter be agreed by the Government of the

Philippines and the Government of the United States of America as being eligible for

inclusion in the Informational Media Guaranty Program authorized by this Agreement.

B. The Government of the United States of America will accept responsibility for insuring

that materials exported to the Philippines pursuant to the contracts of guaranty issued

under applications approved by the two Governments shall conform to the terms of said

guaranty contracts.C. Nothing in this agreement shall be construed as infringing upon the right of the

Government of the Philippines to deny passage through the Philippine customs of any

specific materials, the importation of which is deemed by the Philippine Government to

be contrary to the applicable laws and regulations of the Philippine Government.

2. That if the Government of the United States of America makes

payment in United States dollars to any person under any such guaranty,

the Government of the Philippines will recognize the transfer to the

United States of America of any right, title or interest of such person in

assets, currency, credits, or other property on account of which such

payment was made and the subrogation of the United States of America

to any claim or cause of action of such person arising in connection

therewith. The Government of the Philippines shall also recognize any

transfer to the Government of the United States of America pursuant to

such guaranty of any compensation for loss covered by such guaranties

received from any source other than the Government of the United States

of America.

3. That the peso amounts acquired by the Government of the United

States of America pursuant to such guaranties should be accorded

treatment not less favorable than that accorded, at the time of such

acquisition, to private funds arising from transactions of the United

States nationals which are comparable to the transactions covered by

such guaranties.

4. That the peso amounts acquired by the Government of the United

States of America pursuant to informational media guaranties will be

freely available to the Government of the United States of America for

administrative expenditures, except insofar as the gross aggregate

accruals of such pesos during each twelve-month period beginning

March 1, 1955 exceeds the equivalent of two million, eight hundred

thousand United States dollars computed at a rate of exchange for such

dollars applicable to these types of transactions under the rules and

regulations of the Government of the Philippines at the time said peso

amounts were acquired by the Government of the United States of

America.

5. That the peso amounts acquired by the Government of the United

States of America under informational media guaranty operations in

excess of two million, eight hundred thousand United States dollars

during any twelve-month period beginning March 1, 1955 shall be

available to the Government of the United States of America and

approved by the Government of the Philippines. In the event that the two

Governments, within a period of six months following the expiration of

each twelve-month period referred to in paragraph 4 above, have not

reached an agreement as to the activities for which any such peso

amounts may be expended, such peso amounts will become freely

available to the Government of the United States of America for

administrative expenditures.6. That any claim against the Government of the Philippines to which the

Government of the United States of America may be subrogated as the

result of any payment under such a guaranty, shall be the subject of direct

negotiations between the two Governments. If within a reasonable

period, they are unable to settle the claim by agreement, it shall be

referred for final and binding determination to a sole arbitrator selected

by mutual agreement. If the Governments are unable, within a period of

three months, to agree upon such selection, the arbitrator shall be one

who may be designated by the President of the International Court of

Justice at the request of either Government.

Upon receipt of a note from Your Excellency indicating that the foregoing provisions

are acceptable to the Government of the Philippines, the Government of the United

States of America will consider that this note and your reply thereto constitute an

agreement between the two Governments, the agreement to enter into force on the

date of your note in reply.

Accept, Excellency, the renewed assurances of my distinguished consideration.

R. A. SPRUANCE

His Excellency CARLOS P. GARCIA

Secretary of Foreign Affairs

of the Republic of the Philippines

II

THE PHILIPPINE SECRETARY OF FOREIGN AFFAIRS TO THE

AMERICAN AMBASSADOR

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FOREIGN AFFAIRS

Manila, January 19, 1955

Excellency;

I have the honor to refer to Your Excellency's note No. 0453 dated October 14, 1954,

which is as follows:

[See note I]

and to confirm, in behalf of the Government of the Philippines, that the previous understandings reached on the subject between the representatives of our two Governments are to be modified as indicated in your above-quoted note. It is understood that the beginning of each twelve-month period referred to in paragraphs 4 and 5 of Your Excellency's note shall be March 1 starting with March 1, 1955. Accept, Excellency, the renewed assurances of my highest consideration.

CARLOS P. GARCIA

SecretaryHis Excellency R. A. SPRUANCE Ambassador to the United States of America