Treaty (11 September 2002)

September 11, 2002

CONFEDENTIAL MEMORANDUM OF UNDERSTANDING BETWEEN THE REPUBLIC OF THE PHILIPPINES & THE KINGDOM OF BAHRAIN

Delegations representing the Government of the Republic of the Philippines and the Government of the Kingdom of Bahrain (hereinafter referred to as the Contracting Parties) met in Pasay City, Philippines on 11 September 2002 for bilateral consultations in accordance with Articles 13 and 16 of the Air Services Agreement (hereinafter the "Agreement") dated 29 August 1992.

1. The Philippine delegation was led by Undersecretary Arturo T. Valdez of the Department of Transportation and Communications and the Bahrain delegation was led by Capt. Abdulrahman M. Al Gaoud, Acting Undersecretary for Civil Aviation Affairs, Ministry of Transportation. The list of the members of the two delegations is attached as Attachment (A).

2. The discussions were conducted in a cordial and friendly atmosphere. The two delegations reached the following agreements:

3. Changes in the Agreement (a) Change in the name of the State of Bahrain Both delegations have agreed to change the name of the State of Bahrain wherever mentioned in the Agreement to the Kingdom of Bahrain.

(b) Multiple Carrier Designation Article 3(1) of the Agreement shall be replaced by the following: "Each Contracting Party shall have the right to designate in writing to the other Contracting Party one (1) or more airline(s) for the purpose of operating the agreed services on the specified routes." (c) Definitions Article 1(b) of the Agreement shall be replaced by the following: "Aeronautical Authorities: means in the case of the Kingdom of Bahrain, the Ministry of Transportation represented by Civil Aviation Affairs, and any person or body legally empowered to perform by function at present exercised by the above mentioned Authority or similar functions; and in the case of the Republic of the Philippines, the "Civil AeronauticsBoard", and any person or body legally empowered to perform any functions at present exercised by the above authority or similar functions.

4. Capacity/Route Schedule (a) Capacity Entitlements Further to Article 3(a) of the 26 February 1992 CMU, both delegations have agreed to allow the designated airline(s) of the Kingdom of Bahrain to operate one (1) additional frequency to the already existing capacity on the route Bahrain-Manila v.v. using any aircraft no bigger than Airbus A340 aircraft. Whereas, the designated airline(s) of the Republic of the Philippines may operate unrestricted frequencies from points in the Philippines to the Kingdom of Bahrain.

(b) Bahrain-Clark (Diosdado Macapagal International Airport) v.v. The designated airline(s) of the Kingdom of Bahrain shall be allowed to operate one (1) additional weekly combination (passenger and/or cargo) frequency using aircraft no bigger than Airbus A340 on the route Bahrain-Clark (Diosdado Macapagal International Airport) v.v. This additional frequency may be convertible to an all-cargo service.

(c) Route Schedule Both delegations have agreed to replace the route schedule annexed to the 12 September 1995 CMU pertaining to the Kingdom of Bahrain as per Attachment (B).

5. Code-sharing Both delegations agreed to provide bilateral code-sharing arrangements through their designated airline(s), as follows:

i. In operating or holding out the authorized services on the agreed routes, any designated airline of one Contracting Party may enter into code-sharing arrangements with an airline or airlines of the other Contracting Party;

ii. Such arrangements shall be allowed provided that the airline or airline(s) mentioned in paragraph (1) above; - Hold(s) the appropriate authority; and - Meet(s) the requirements normally applied to such arrangements.

iii. In respect of bookings, issuing and selling tickets pursuant to any code-sharing arrangements, make(s) it clear to the purchaser at the pointof sale which airline will actually operate each sector of the service." 6. Other matters In order to promote tourism and trade between the two respective countries and to encourage the designated airline(s) of the Republic of the Philippines to operate to the Kingdom of Bahrain, the Bahrain delegation offered the following: > Free landing and parking to the designated airline(s) of the Republic of the Philippines upon their operation to the Kingdom of Bahrain. > Favourable fuel prices. > 50% discount on handling from the normal applicable charges. The above offer shall be valid with immediate effect for a period of two years and shall be reviewed favourably for extension for a further period.

7. Entry into Force This CMU is supplementary to the 26 February 1992 joint CMU and shall provisionally enter into force upon signing and definitively upon the exchange of diplomatic notes confirming the completion of the Contracting Parties' internal legal requirements for such entry into force. Done at Pasay City, Philippines this 11th day of September 2002.

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF THE THE REPUBLIC OF THE KINGDOM OF BAHRAIN: PHILIPPINES:

(Sgd.) (Sgd.) CAPT. ABDUlRAHMAN M. AL ARTURO T. VALDEZ GAOUD Undersecretary Acting Undersecretary Department of Transportation and for Civil Aviation Affairs Communications Ministry of Transportation THE REPUBLIC OF THE PHILIPPINES DELEGATION Chairman Undersecretary Arturo T. Valdez Department of Transportation and Communications Members Undersecretary Evelyn B. Pantig Department of Tourism Atty. Maria Angela PonceDirector, Treaties Division Office of Legal Affairs Department of Foreign Affairs Mr. Alberto A. Lim CAB Board Member Civil Aeronautics Board Atty . Lito A. Mondragon CAB Board Member Civil Aeronautics Board Atty. Manuel C. San Jose Executive Director Civil Aeronautics Board Ms. Ma. Salome Rebosura Department of Trade and Industry Atty. Evelyn R. Cajigal Director Department of Tourism Mr. Porvenir P. Porciuncula Chief Transportation Development Officer Civil Aeronautics Board Mr. Edgardo O. Monte Supervising Transportation Regulation Officer Civil Aeronautics Board Atty. Emmanuel Noel A. Cruz Department of Transportation and Communications Ms. Adelaida Olboc Supervising Transportation Development Officer Department of Transportation and Communications Mr. Lauro A. Ortile Manager - Corporate Planning & Information Systems Dept. Clark Development CorporationAdvisors Ms. Ma. Delia P. Vera Vice President Corporate Planning and External Affairs Cebu Pacific Air Atty. Racquel T. Ruiz-Dimalanta Director Legal Affairs Cebu Pacific Air Ms. Inez F. Jose Manager, Business Development & External Affairs Cebu Pacific Air Mr. Jose Enrique L. Perez de Tagle Manager-Government Affairs Philippine Airlines Atty. Enrique Esquivel Legal Counsel Philippine Airlines Ms. Dina Pecana Sr. Specialist Philippine Airlines THE KINGDOM OF BAHRAIN DELEGATION Chairman Capt. Abdulrahman M. AI Gaoud Actg. Undersecretary For Civil Aviation Affairs Member Mr. Ahmed Nemat Ali Director of Air Transport Mr. Abdulelah Al-Amer Senior Air Services Agreements Specialist Mr. Adel Saleh Manager Govt. and Int'l Relations (Asia, Pacific and CIS Region), Gulf AirMr. Roberto Hukom Acting Manager-Philippines Gulf Air

ANNEX

ROUTE SCHEDULE

I. Routes to be operated by the designated airline(s) of the Kingdom of Bahrain: INTERMIDIATE DESTINATION BEYOND POINT OF ORIGIN POINTS POINTS POINTS Singapore Japan Manila Thailand PROC Bahrain Cebu Hongkong Guam Clark Vietnam S. Korea Notes:

a. The designated airline(s) of Bahrain may, on any or all flights, omit calling at any of the points in its route schedule, provided that the agreed services on these routes begin in Bahrain:

b. The designated airline of Bahrain will be permitted to exercise fifth freedom traffic rights only on the route Bahrain/Singapore/Cebu/Clark and v.v. route.

c. Cebu may be operated as a co-terminal point on the two weekly frequencies.

II. Routes to be operated by the designated airline(s) of the Philippines: INTERMIDIATE DESTINATION BEYOND POINT OF ORIGIN POINTS POINTS POINTS Points in the Any point(s) Bahrain Any points Philippines Notes:

a. The designated airline(s) of the Philippines may, on any or all flights, omit calling at any of the points in its route schedule, provided that the agreed services on these routes begin in the Philippines.

b. The designated airline(s) of Philippines will be permitted full traffic rights on the intermediate and beyond points.