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1. For the purpose of promoting cultural activities in the Republic of the Philippines, the Government of Japan will extend to the Government of the Republic of the Philippines, in accordance with the relevant laws and regulations of Japan, a grant up to forty-seven million yen (¥47,000,000) (hereinafter referred to as "the Grant").  

2. The Grant will be used by the Government of the Republic of the Philippines properly and exclusively for the purchase of the Equipment, which will be products of Japan and of services necessary for the transportation of the Equipment to ports in the Republic of the Philippines.

3. The Grant will be made available during the period between the date of coming into force of the present arrangements and March 31, 1989, unless the period is extended by mutual agreement between the authorities concerned of the two Governments.

4. (1) The Government of the Republic of the Philippines or its designated authority will enter into contracts in Japanese yen with Japanese nationals or Japanese juridical persons controlled by Japanese nationals for the purchase of the Equipment and services referred to in paragraph 2.  Such contracts shall be verified by the Government of Japan to be eligible for the Grant.

(2) The Government of the Republic of the Philippines or its designated authority will open through banking arrangements an account to be used only for the purpose of the implementation of the Grant, in the name of the Government of the Republic of the Philippines in an authorized foreign exchange bank of Japan designated by the Government of the Republic of the Philippines or its designated authority.

(3) The Government of Japan will make payments in Japanese yen to cover the obligations incurred by the Government of the Republic of the Philippines or its designated authority under the verified contracts (2) With regard to the shipping and marine insurance of the Equipment purchased under the Grant, the two Governments will refrain from imposing any restrictions that may hinder fair and free competition among the shipping and marine insurance companies.

I have further the honour to propose that the present Note and Your Excellency's Note in reply confirming on behalf of the Government of the Republic of the Philippines the foregoing arrangements shall be regarded as constituting an agreement between the two Governments, which will enter into force on the date of Your Excellency's reply.

I avail myself of this opportunity to renew to Your Excellency the assurance of my highest consideration.

(Sgd.)  TSUNEO TANAKA
  Ambassador Extraordinary and Plenipotentiary
  of Japan to the Republic of the Philippines

His Excellency Raul S. Manglapus

  Secretary of Foreign Affairs
  Department of Foreign Affairs
  Republic of the Philippines