Supreme Court E-Library
Information At Your Fingertips

March 25, 1988

With reference to the Agreed Minute on the Consolidation of the Debt of the Republic of the Philippines signed in Paris on January 22, 1987 between the representatives of the Government of the Republic of the Philippines and the representatives of the Governments of the Participating Creditor Countries including the Republic of Finland, (hereinafter referred to as "the Agreed Minute"), Vientitakuulaitos/Export Guarantee Board/, (hereinafter referred to as "VTL"), as the appropriate institution referred to in the Agreed Minute, and the Government of the Republic of the Philippines with the Central Bank of the Philippines as its fiscal agent have agreed as follows:

ARTICLE 1

This Agreement shall apply to payments of principal and interest on the Philippine debt, which is based on commercial credit guaranteed by VTL and related to the contract concluded before April 1, 1984 and has an original maturity o£ more than one year and not paid.

The debt thus covered by this Agreement concerns the payment under the loan agreement between Finnish Export Credit Ltd. and Philippine National Bank signed on December 17, 1979 and are specified as follows:

amounts due from January 1, 1987 up to June 30, 198

If needed the above sums may be altered or amended by agreement between the Central Bank of the Philippines and VTL.

ARTICLE 2

Payments of the amounts of principal and interest under Article I shall be paid as follows:

April 1, 1993
October 1, 1993
April 1, 1994
  October 1, 1994
  April 1, 1995
  October 1, 1995
  April 1, 1996
  October 1, 1996
  April 1, 1997
  October 1, 1997

ARTICLE 3

Interest shall be paid on all outstanding amounts covered by this Agreement. Such interest shall start to accrue on the original contractual due dates of corresponding total sums and is calculated on the basis of a 360 day year and a 30 day month and shall be paid semiannually on April 1 and October 1 of each year, commencing on April 1, 1988.

The rate of interest shall be determined as follows:

— the rate of interest for the first interest period shall be 8 % p.a.
 
— the rate of interest for the succeeding interest periods shall be determined separately for each interest period and shall by 0,5 perrcentage unit p.a. exceed the rate at which six months eurodollar deposits for a sirailar amount are offerred to Citibank in the London Interbank Market/LIBOR/as quoted by Postipankki at or around 11 a.m./London time/on a Helsinki banking day falling two banking days in London prior to the beginning of the interest period in question. In the event however, that no deposits are being offered to Citibank to be quoted by Postipankki, as aforesaid, the debts shall bear interest at a rate which by 0.5 percentage unit p.a. exceeds such deposits may otherwise first class bank in the international loan market to be mutually agreed upon.
 
— the overdue interest payable on any overdue payment shall be the rate of 0.5 % p.a., above the aforesaid rate of interest calculated from the date of maturity of each instalment to the date of payment thereof.

Statements as to the interest rate applicable shall be forwarded promptly by VTL to the Central Bank of the Philippines for each succeeding interest period.

ARTICLE 4

All payments covered by Articles 2 and 3 of this Agreement shall be effected in US-dollars.

ARTICLE 5

All payments covered by this Agreement shall be made without deduction for transaction cost and for any present or future taxes or withholdings of any nature imposed in the Republic of the Philippines.

If an amount paid under the Agreement is not sufficient to cover the total amount due, the amount paid shall be allocated against the Debts in the chronological order of their maturity and thereby in the first instance against interest accrued after the due date, in the second instance against interest accrued up to the due date (inclusive) and thereafter against principal. The Central Bank of the Philippines shall be promptly advised of the allocation of the payments.

ARTICLE 6

All payments covered by this Agreement shall be effected to VTL, to the Account 3406-3 with Postipankki, Unioninkatu 20, 00007 Helsinki, Finland.

Fifteen (15) days before each payment VTL shall give notice by telex to Central Bank of the Philippines- specifying the amounts to be paid according to Articles 2 and 3 of this Agreement.

The address of the Central Bank of the Philippines is:

Central Bank of the Philippines
  Roxas Boulevard
  Malate, Manila
  Attention: Debt Restructuring Office
  Management of External Debt Department
  Telex No.: 63477 CBDRO PN/53343 CENBNK

The address of VTL is;

Vientitakuulaitos
  P.O. Box 187
  00131 Helsinki
  Finland
  Telex No.: 121778 vtl sf
  Telefax No.: 651 881

ARTICLE 7

With the exception of what has been stipulated above, this Agreement shall not affect contractual rights and obligations of Finnish Export Credit Ltd. and Philippine National Bank under the Loan Agreement signed on December 17, 1979.

ARTICLE 8

The Government of the Republic of the Philippines or its fiscal agent authorized thereto and VTL shall endeavor to settle any disputes by negotiations or by such means as they may agree upon.

A dispute that is not settled by such negotiation shall be finally settled by arbitration in Stockholm under the Rules of Conciliation and Arbitration of the International Chamber of Commerce (hereinafter referred to as "Rules") by three arbitrators appointed .in accordance with the Rules. The decision of the arbitrators shall be final and binding on the Government of the Republic of the Philippines and VTL.

ARTICLE 9

This Agreement terminates when all payments to be made under Articles 2 and 3 have been received by VTL.

ARTICLE 10

In addition to the articles above, the articles III.2, (excepting the interest rate), III.8 and IV.3 of the Agreed Minute constitute a binding part of this Agreement.

ARTICLE 11

This Agreement enters into force on the date of signature.

In witness whereof the undersigned, representatives of the Government of the Republic of the Philippines and VTL being duly authorized thereto, have signed this Agreement.

Done in duplicate in English.

in Manila, this 25th day of March, 1988.