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November 13, 1987

WHEREAS the Government of Canada (hereinafter called "CANADA") and the Government of the Republic of the Philippines (hereinafter called "PHILIPPINES") have entered into a loan agreement for the purchase of development goods and services in support of the Cagayan Valley-Cooperative Project on November 15, 1974 (hereinafter called "Loan Agreement");

AND WHEREAS CANADA has sent a Notice to the PHILIPPINES pursuant to section 4.03 of the Loan Agreement on December 23, 1980 to advise the PHILIPPINES of the new amount of the loan and of new repayment schedule;

AND WHEREAS CANADA has approved the repayment of the Loan in local Philippine currency;

AND WHEREAS CANADA has agreed to new repayment conditions at the Paris Club Meeting held on January 22, 1987;

AND WHEREAS CANADA and the PHILIPPINES agree to amend the Loan Agreement to reflect the Notice of December 23, 1980 and the Paris Club meeting;

NOW THEREFORE, CANADA and the PHILIPPINES agree to amend the Loan Agreement as follows:

1. The first sentence of section 1.01 of the Loan Agreement is replaced by the following:

"CANADA shall make available to the Philippines on the terms and conditions hereinafter set forth a Loan in the amount not to exceed three million eight hundred and eighty-six thousand, three hundred and seventy-one Canadian dollars and forty-two cents (CDN $3,886,371.42)."

2. Section 1.04 of the Loan Agreement is replaced by the following:

"Repayment of the principal amount of the Loan shall be made in the local Philippine currency equivalent to the amount due in Canadian dollars for each payment at the date of such payment, in accordance with the schedule attached hereto."

3. Section 1.06 of the Loan Agreement is replaced by the following:

"All payments and repayments as set forth herein shall be made by the Philippines in the local Philippines currency to the Receiver General for Canada and shall be deemed to have been paid when received by the Receiver General for Canada."

4. This amendment shall be read and construed with the Loan Agreement of November 15, 1974 and the said Loan Agreement as hereby amended shall remain in full force and effect.

5. This amendment shall come into force on the date of its signature.

IN WITNESS THEREOF, the parties undersigned, being duly authorized have signed this amendment.

Done in duplicate at Manila this 13th day of November 1987.

MEMORANDUM OF UNDERSTANDING BETWEEN THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES AND THE GOVERNMENT OF CANADA CONCERNING THE THE COMMODITY ASSISTANCE PROJECT (PROJECT NO.: 734/14469)

MEMORANDUM OF UNDERSTANDING BETWEEN THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES AND THE GOVERNMENT OF CANADA

The Government of Canada (hereinafter called "CANADA") and the Government of the Republic of the Philippines (hereinafter called "PHILIPPINES"), desiring to record an understanding concerning a Canadian development assistance Project to provide balance of payments support to the PHILIPPINES have agreed as follows:

SECTION 1.01

This Memorandum of Understanding does not constitute an international treaty: it is intended only to set out the responsibilities of the two Governments in relation to the Project.

SECTION 1.02

This Memorandum of Understanding shall be a subsidiary arrangement of the General Agreement between CANADA and the PHILIPPINES upon its ratification by the Philippines.

SECTION 2.01

CANADA designates the Canadian International Development Agency (hereinafter called "CIDA") as the agency responsible for the implementation of its obligations under this Memorandum of Understanding.

SECTION 2.02

The PHILIPPINES designates the National Economic and Development Authority (hereinafter called "NEDA") as the agency responsible for the implementation of its obligations under this Memorandum of Understanding.

SECTION 3.01

CANADA and PHILIPPINES shall participate in a project to provide the PHILIPPINES with Can adian commodities (hereinafter called the "Project"), as mutually agreed upon according to Annex "A", thus strengthening the PHILIPPINES' ability to maintain a necessary level of essential imports for priority productive activities. The objective of the Project is to provide balance of payments support to the PHILIPPINES to allow the achievement of economic stability and recovery.

SECTION 3.02

Procurement of goods and services relating to the Project shall be performed by PHILIPPINES with the assistance of a Canadian procurement advisor/monitor provided by CANADA and as set forth in Annexes "B" and "C".

SECTION 3.03

Procurement of the commodities relating to the Project shall shall have be supplied from Canadian suppliers and shall have a Canadian content of at least 66 2/3%.

SECTION 3.04

The Project is more particularly described in Annex "8".

SECTION 4.01

The contribution of Canada shall consist of the procurement and shipping of Canadian commodities as well as the provision of professional services of a Canadian procurement advisor/monitor, and evaluation, all as more particularly set forth in Annexes "A" and "B". The total value of CANADA's contribution shall not exceed thirty million three hundred thousand Canadian dollars {CDN $30,300,000.).

SECTION 4.02

The proceeds of the contribution shall not be used by the PHILIPPINES to pay any taxes, fees, customs duties or any other levies or charges imposed directly or indirectly by the PHILIPPINES on any goods, materials, equipment, vehicles and services purchased or acquired for, or related to, the execution of the Project.

SECTION 5.01

The contribution of the PHILIPPINES shall consist of the provision of qualified personnel, facilities, services and other Project requirements all as more particularly set forth in Annexes "B" and "C".

SECTION 6.01

The PHILIPPINES and CANADA shall ensure that this Memorandum of Understanding is carried out with due diligence and efficiency and each shall furnish to the other all such information relating to the Project as shall reasonably be requested.

SECTION 7.01

Any communications or documents given, made or sent by either the PHILIPPINES or CANADA pursuant to this Memorandum of Understanding, shall be in writing and shall be deemed to have been duly given, made or sent to the party to which it is addressed at the time of its delivery by hand, mail, telegram, cable or telex at its respective address, namely:

SECTION 7.02

Any one of the parties hereto may, by written notice to the other party hereto, change the address to which any notice or request intended for the party so giving such notice shall be addressed.

SECTION 7.03

All communications and documents submitted to CANADA shall be in either the English or the French language, and those submitted to the PHILIPPINES shall be in the English 1 anguage.

SECTION 8.01

Differences which may arise in the application of the provisions of this Memorandum of Understanding shall be settled by means of negotiations between CANADA and the PHILIPPINES or by any other manner mutually agreed upon by their respective Governments.

SECTION 9.01

This Memorandum of Understanding together with Annexes "A1 and "B" and "C" which form an integral part hereof constitutes the entire understanding between the Parties with respect to the Project.

SECTION 10.01

CANADA and the PHILIPPINES will endeavour to consult each other in respect of any matter that may from time to time arise in connection with this Memorandum of Understanding.

SECTION 11.01

In connection with the contribution of CANADA for the purchase and delivery of Canadian commodities pursuant to the Memorandum of Understanding, the PHILIPPINES agree to undertake all reasonable precautions:

(a) not to divert any shipment of Canadian commodities under this contribution directly to any other non-Philippines destination; and

(b) not to utilize any shipment of Canadian commodities under this contribution for military purposes.

SECTION 11.02

This Memorandum of Understanding shall come into and effect on the date of signature and shall expire on the 31st day of March 1991. This Memorandum of Understanding may be amended from time to time, as deemed necessary, by mutual agreement by an exchange of letters.

IN WITNESS WHEREOF, the undersigned have signed this Memorandum of Understanding in duplicate in Manila on the 13th day of November, 1987.