Treaty (11 June 1968)

June 11, 1968

EXCHANGE OF NOTES CONSTITUTING AN AGREEMENT

BETWEEN THE UNITED STATES OF AMERICA AND THE

PHILIPPINES ON THE USE OF THE SPECIAL FUND FOR

EDUCATION FOR THE FUND FOR ASSISTANCE TO PRIVATE

EDUCATION

UNITED STATES OF AMERICA

SPECIAL FUND FOR EDUCATION

Agreement effected by exchange of notes, Signed at Manila 11 June

1968, With Annex; Entered into force 11 June 1968.

I

The American Charge d' Affaires ad interim to the Secretary of Foreign Affairs of

the Philippines

No. 942

Manila, June 11, 1968

Excellency:

I have the honor to refer to our April 26, 1966 ' exchange of notes concerning the

Special Fund for Education authorized by United States Public Law 88-94, approved

August 12, 1963, as an amendment to the Philippine War Damage Legislation of

1962, and to the recent discussions about the project for Assistance to Private

Education, proposed by Your Excellency's Government. The details of this project

are elaborated in Annex A to this note.

As indicated in Annex A, this project, entitled Fund for Assistance to Private

Education, calls for the establishment of a permanent trust fund with all earnings

there from available for various programs of assistance to private education. The

activities of the Fund will assure continued development and improvement of

Philippine private schools through stimulating progress toward quality and

excellence, and emphasis on study in those educational fields necessary to meet

crucial manpower needs for Philippine national development.

I now have the honor on behalf of my Government to inform Your Excellency that

this project, as outlined in Annex A to this note, has been approved, and for this

purpose six million one hundred fifty-four thousand dollars ($6,154,000) will be

made available from the Special Fund for Education. I have the further honor to

propose that the following undertakings, drawn up in accordance with our April 26,

1966, exchange of notes, govern the implementation of this project:

1. The United States Government shall make the dollar disbursement for this project

in depository banks designated by the Chairman of the National Economic Councilof the Government of the Republic of the Philippines to the credit to" the Fund for

Assistance to Private Education. This disbursement shall be made within two weeks

of the execution of the trust deed referred to in paragraph 2 below.

2. The enduring character of the Fund for Assistance to Private Education is secured

by the undertaking of Your Excellency's Government to ensure that the irrevocable

trust deed, establishing the Private Education Assistance Committee as trustee of the

Fund, will stipulate that the principal of the Fund is to be maintained intact with only

the earnings there from being utilized to finance programs of assistance to private

education, but excluding any support of religious worship or instruction.

3. Materials descriptive of the origin of the Fund for Assistance to Private Education,

projects undertaken through grants from the Fund, and buildings financed in whole

or in part through grants from the Fund shall appropriately identify the contribution

of the Special Fund for Education made available by the people of the United States

during World War II.

4. Your Excellency's Government shall provide the Government of the United States

with a copy of an annual report of the activities of the Fund for Assistance to Private

Education.

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

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

of the United States of America will consider that this note with its annex and Your

Excellency's reply thereto constitute an agreement between our two Governments on

the use of the Special Fund for Education for the Fund for Assistance to Private

Education.

Accept, Excellency, the assurances of my highest consideration.

JAMES M. WILSON, JR.

Attachment:

Annex A.

His Excellency NARCISO RAMOS

Secretary of Foreign Affairs

Manila

A N N E X A

FUND FOR ASSISTANCE TO PRIVATE EDUCATION CREATED

BY THE SPECIAL FUND FOR EDUCATION

I. DESCRIPTION OF THE FUND

The Government of the Philippines will create a permanent trust fund, hereinafter

referred to as the Fund. The earnings of the Fund will be utilized exclusively for the

benefit of private education in the Philippines, and its principal may be augmented

by future grants, donations and transfers by the Philippine Government or any other

public or private entity. The Fund will be managed so as to maximize its earnings,but also in a prudent manner consistent -with its character as a perpetual trust. The

Fund's earnings, whether in the form of interest, dividends or capital gains, will be

used to finance grants and/or loans for faculty training and development in the forms

of scholarships, research grants, faculty incentives, inter-institutional cooperative

projects, and other programs of benefit to private education. Any unused earnings

may be capitalized to increase the principal of the Fund.

II. ORGANIZATION AND STAFFING

To administer and serve as trustee of the Fund there shall be created a Private

Education Assistance Committee hereinafter called "the Committee", composed of

the Secretary of Education or his representative as Chairman, a representative from

the National Economic Council, and one representative from each of the following

three educational associations which are members of the Board of National

Education, Catholic Educational Association of the Philippines, Association of

Christian Schools and Colleges, and the Philippine Association of Colleges and

Universities. Decisions of the Committee will be made with the concurrence of the

Chairman. The Committee will, as necessary, consult with the Philippine Manpower

Development Council.

The Private Education Assistance Committee will serve as the trustee of the Fund

and in this capacity will set investment policy; establish priorities among the various

possible project areas defined by the guidelines set forth under paragraph III below;

provide for the receiving and processing of project applications; and make all

decisions on the use of the Fund's income and capital gains, including final action on

individual applications for grants and/or loans. Since the project priorities

established by the Committee will constitute a current assessment of the Philippine

Government's national requirements in private education, they will be reviewed

periodically and revised as necessitated by changing conditions. In order to avail of

professional counsel and services in the management of the capital entrusted to it,

the Committee may retain an investment and financial manager.

III. GUIDELINES FOR USE OF FUND

In arriving at decisions on individual project applications for grants and/or loans

from

earnings of the Fund, the Committee shall be guided by the following

considerations, which

shall be weighed equally:

(A) The project’s contribution to improvement in the quality of Philippine education.

(B) The project's relation to a field of study or specialization of high priority for

national growth.

(C) The significance of the contribution, and potential contribution through the

project, of the applying institution or association to educational needs in a specific

geographic area or region of the Philippines.

(D) The amount of funds requested for the project as consistent with Fund assistance

to as many institutions as possible.(E) An assessment of the institution's or associations past and current efforts to

improve the quality of its education and the quality of its planning for the future.

IV. IMPLEMENTING SCHEDULE

Implementation of this project shall be accomplished as follows:

(a) Organization of the Private Education June 18, 1968

Assistance Committee and Entry into Force of

Deed of Trust

(b) Release of $6,154,000 by U.S.

July 1, 1968

Government

(c) Start of Investment Program July 15, 1968

(d) Programming of Income Jan. 1, 1969

(e) Announcement of Procedures for Project

Feb. 1, 1969

Application

(f) Start of Project Applications April 1, 1969

(g) Begin Awards July 1, 1969

II

The Secretary of Foreign Affairs of the Philippines to the American Charge

d'Affaires ad

interim

No. 138992

Manila, June 11, 1968

Sir:

I have the honor to acknowledge the receipt of your Note No. 942 dated June 11,

1968 concerning the Special Fund for Education authorized by Public Law 88-94,

approved August 12, 1963, as an amendment to the Philippine War Damage

legislation of 1962 and the recent discussions about the project for Assistance to

Private Education which reads as follows:

[SEE NOTE I]

I wish to inform you that the foregoing understandings are acceptable to the Government of the Philippines and will consider your note with its annex and this note as constituting an agreement between our two Governments on the use of the Special Fund for Education for the Fund for Assistance to Private Education. Accept, Sir, the assurances of my highest consideration. NARCISO RAMOS Secretary of Foreign AffairsThe Honorable JAMES M. WILSON, JR. Charge d’Affaires Embassy of the United States of America Manila