Treaty (7 May 1984)

May 07, 1984

LOAN AGREEMENT FOR COMMODITY LOAN VIII BETWEEN THE OVERSEAS ECONOMIC COOPERATION FUND, JAPAN AND THE CENTRAL BANK OF THE PHILIPPINES DATED MAY 7, 1984

Table of Contents

Article I Loan

Section 1. Amount of Loan

Section 2. Use of Proceeds of Loan

Article II Repayment and Interest

Section 1 Repayment of Principal

Section 2 Interest and Method of Payment thereof

Article III Particular Covenants

Section 1 General Terms and Conditions

Section 2 Guarantee for Loan

Section 3 Procurement Procedure

Section 4 Disbursement Procedure

Section 5 Use of Peso Counterpart Fund

Section 6 Notices and Requests Schedule 1 List of Eligible Commodities Schedule 2 Amortization Schedule Schedule 3 General Terms and Conditions Schedule 4 Procurement Procedure Schedule 5 Commitment Procedure (III) Schedule 6 Reimbursement Procedure Schedule 7 Counterpart Fund Account Loan Agreement No. PH-C8 for Commodity Loan VIII, dated May 7, 1984, between THE OVERSEAS ECONOMIC COOPERATION FUND and THE CENTRALBANK OF THE PHILIPPINES. In the light of the contents of the Exchange of Notes between the Government of Japan and the Government of the Republic of the Philippines, dated April 28, 1984, concerning a Japanese loan to be extended with a view to contributing to the economic stabilization and development of the Republic of the Philippines, THE OVERSEAS ECONOMIC COOPERATION FUND (hereinafter referred to as "the Fund") and THE CENTRAL BANK OF THE PHILIPPINES (hereinafter referred to as "the Borrower") herewith conclude the following Loan Agreement (hereinafter referred to as "the Loan Agreement", which includes all agreements supplemental hereto).

ARTICLE I

LOAN

1. Amount of Loan The Fund agrees to lend the Borrower an amount not exceeding THIRTY FIVE BILLION TWO HUNDRED AND TWO MILLION Japanese YEN (¥35,202,000,000.) as principal on the terms and conditions set forth in the Loan Agreement and in accordance with the relevant laws and regulations of Japan (hereinafter referred to as "the Loan"), provided, however, that when the cumulative total of disbursements under the Loan Agreement reaches the said limit, the Fund shall make no further disbursement.

2. Use of Proceeds of Loan (1) The proceeds of the Loan shall be used to cover payments already made or to be made, on and after January 1, 1984, to suppliers of eligible source countries scope of which is set forth in section 2 of Schedule 4 attached hereto (hereinafter referred to as "the Supplier") by purchasers in the Republic of the Philippines (hereinafter referred to as "the Purchaser") under such contracts as have been or may be entered into between them for the purchase of the commodities enumerated in the List of Eligible Commodities attached hereto as Schedule 1 and the purchase of services incidental thereto (hereinafter referred to as the "Contract"), provided that such purchases are made in such eligible source countries for commodities produced in and services supplied from those countries.

(2) The amount of the Loan not exceeding SIX BILLION Japanese Yen (¥6,000,000,000.) may be used to cover payments already made between January 1, 1984, and May 6, 1984. The remaining part of the Loan shall be used to cover payments to be made on and after May 1, 1984.

(3) The Borrower shall invest the equivalent in Philippine Pesos of the amount of Japanese Yen disbursed by the Fund thereinafter referred to as "Peso Counterpart Fund") in securities issued by the Government of the Republic of the Philippines. The Borrower shall cause the Government of the Republic of the Philippines to deposit the proceeds of the sale of such securities in the Special Account in the name of the Government of the Republic of the Philippines with the Borrower and utilizeit to cover local currency requirements of the development projects in the Republic of the Philippines implemented under loans in Japanese Yen by the Fund, except where the Fund and the Borrower agree that the said deposit of the proceeds may be used for other development projects of the Government of the Republic of the Philippines, in accordance with the relative provisions stipulated in Schedule 7 of the Loan Agreement.

(4) The List of Eligible Commodities may be modified when agreed upon between the Fund and the Borrower.

(5) Commodities purchased under the Loan shall not serve military purposes? (6) The final disbursement under the Loan Agreement shall be made not later than May 7, 1986 and no further disbursement shall be made by the Fund thereafter, unless otherwise agreed upon between the Fund and the Borrower-

ARTICLE II

REPAYMENT AND INTEREST

1. Repayment of Principal The Borrower shall repay the principal of the Loan to the Fund in accordance with the Amortization Schedule set forth in Schedule 2 attached hereto. Interest and Method of Payment thereof (1) The Borrower shall pay the interest to the Fund semi-annually at the rate of three and a half percent (3.5%) per annum on the principal disbursed and outstanding.

(2) The Borrower shall pay to the Fund on May 20 of each year the interest that has accrued up to May 19 of that year from November 20 of the preceding year, and on November 20 of each year the interest that has accrued up to November 19 from May 20 of that year, provided that, prior to the date of the final disbursement of the proceeds of the Loan, the Borrower shall pay to the Fund on June 20 of each year the interest that has accrued up to May 19 of that year from November 20 of the preceding year, and on December 20 of each year the interest that has accrued up to November 19 from May 20 of that year.

ARTICLE III

PARTICULAR COVENANTS

1. General Terms and Conditions Other terms and conditions generally applicable to the Loan Agreement shall be set forth in General Terms and Conditions attached hereto as Schedule 3 with the following supplemental stipulations (hereinafter referred to as "the General Terms and Conditions"):

(a) The term "the Project" referred to in the General Terms and Conditions shall mean "purchase of commodities and services incidental thereto".

(b) Article III of the General Terms and Conditions shall be disregarded.(c) Paragraph (1) through paragraph (5) except paragraph (3) in Section 5.06. of the General Terms and Conditions shall be disregarded.

(d) Article VI of the General Terms and Conditions shall be disregarded, and, consequently, all references to "the Guarantee"; or "the Guarantor", wherever mentioned in the General Terms and Conditions shall be likewise disregarded.

2. Guarantee for Loan The Borrower shall obtain and submit to the Fund a written Guarantee of the Government of the Republic of the Philippines that confirms the backing of the Government of the Republic of the Philippines to the Borrower in meeting its obligation under the Loan Agreement and the full responsibility of the Government of the Republic of the Philippines for the use of the Peso Counterpart Fund from the Loan.

3. Procurement Procedure The procurement of commodities and services incidental thereto under the Loan Agreement shall be made in accordance with Procurement Procedure attached hereto as Schedule 4. Disbursement Procedure The disbursement procedure mentioned in Section 4.01. of the General Terms and Conditions shall be Commitment Procedure (III) attached hereto as Schedule 5, provided, however, that in case of disbursement for Contract the payment of which to the Supplier has already been made between January 1, 1984 and May 6, 1984 or for Contract the amount of which is less than ¥4,000,000., US$20,000., D.M.48,000., STG.£12,000., F.FR.160,000. or S.FR.40,000., Reimbursement Procedure attached hereto as Schedule 6 shall be applied.

6. Notices and Requests The following addresses are specified for the purpose of Section 8.03. of the General Terms and Conditions: For the Fund Postal address: THE OVERSEAS ECONOMIC COOPERATION FUND Takebashi Godo Building, 4-1, Ohtemachi 1-chome Chiyoda-ku, Tokyo 100, Japan Attention: Director, Loan Department I Cable address: COOPERATION FUND TOKYOTelex: (1) Call No. J28430 Answer Back Code: COOPFUND J28430 (2) Call NO. J28790 Answer Back Code: COOPFUND J28790 For the Borrower Postal address: THE CENTRAL BANK OF THE PHILIPPINES Manila, Philippines Attention: Director, Management of External Debt and Investment Accounts Department Cable address: PHILCENBANK MANILA Telex: Call No. 63343 Answer Back Code: CENBNK PN If the above addresses and/or names are changed, the party concerned shall immediately notify the other party hereto of the new addresses and/or names.

IN WITNESS WHEREOF, the Fund and the Borrower, acting through their duly authorized representatives, have caused the Loan Agreement to be duly executed in their respective names and delivered at the office of THE OVERSEAS ECONOMIC COOPERATION FUND, Chiyoda-ku, Tokyo, Japan, as of the day and year first above written. For For THE OVERSEAS THE CENTRAL BANK ECONOMIC OF THE COOPERATION FUND PHILIPPINES JOSE B.

TAKASHI HOSOMI FERNANDEZ JR.

President Governor THE OVERSEAS ECONOMIC COOPERATION FUND TAKEBASHI GODO BUILDING 4-1, OHTEMACHI 1-CHOME, CHITODA-KU TOKYO 100 JAPANTELEX: CALL NO. J28790. J2S360. J2B43O A.A.B. COOPFUND TOKYO CABLE ADDRESS: COOPERATIONFUND" TOKYO Side Letter Date: May 7, 1984 Ref. No. PH-C8/SL Honorable Governor Mr. Jose B. Fernandez Jr. The Central Bank of the Philippines Reference:Commodity Loan (VIII) under the Loan Agreement No. PH-C8 With reference to the Loan Agreement No. PH-C8 dated May 7, 1984 between THE OVERSEAS ECONOMIC COOPERATION FUND (hereinafter referred to as "the Fund") and THE CENTRAL BANK OF THE PHILIPPINES (hereinafter referred to as "the Borrower"), I have the pleasure to confirm the following agreement between the Fund and the Borrower. In order to secure the efficient and impartial use of the proceeds of the Loan by the purchasers in the Republic of the Philippines (hereinafter referred to as "the Purchaser"), the Borrower shall establish and submit to the Fund the procedures covering the matters mentioned below, which are applicable to procurement whose payments to suppliers are to be made in accordance with Commitment Procedure (III) stipulated in the Loan Agreement, before the Borrower enters into the implementation of the Loan for the portion subject to Commitment Procedure (III):

1. Criteria of allocating the proceeds of the Loan to the Purchaser 2. Process between filing of application from and authorization to the Purchaser to use the proceeds of the Loan 3. Method of announcement to the Purchaser of the availability of the proceeds of the Loan 4. Exchange rate to be used in calculating Philippine Peso amount to be deposited by the Purchaser 5. Monitoring system of the Borrower to supervise the efficient and impartial use of the proceeds of the Loan 6. Demarcation among the Borrower, the authorities concerned of the Government of the Republic of the Philippines and L/C Issuing Bank, regarding Item 1. to 5. mentioned above Please confirm your consent to the foregoing by signing two copies of this Letter, retaining one for your records and returning the other to us.Very truly yours, THE OVERSEAS ECONOMIC COOPERATION FUND TAKASHI HOSOMI President Confirmed: On the date of May 7, 1984 THE CENTRAL BANK OF THE PHILIPPINES BY_____________________ JOSE B. FERNANDEZ JR. GOVERNOR