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May 29, 1953

Note: The Agreement entered into force, June 17, 1953.

Reference: This Agreement is also published in 213 UNTS, p. 370.

I

THE PHILIPPINE ACTING SECRETARY OF FOREIGN AFFAIRS TO THE AMERICAN AMBASSADOR

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FOREIGN AFFAIRS

Manila, May 29, 1953

Excellency:

I have the honor to refer to the exchange of notes between the Embassy and. this Department on December 29, 1952 which constituted an agreement between, our two Governments for the implementation of Article V of the Military Bases Agreement and to Your Excellency's more recent note on the subject (No. 1155) concerning the difficulty which continue to be experienced by authorized con­tractors and importers of the United States Government in placing their orders for imported materials urgently required in construction projects being under­taken in the military bases.

As was pointed out by the representative of this Department during the last conference held in this matter with the representatives of the Embassy, the 13th Air Force and the United States Navy the delay in the speedy placement of these import orders has quite unexpectedly arisen from the inability of the Exchange

Control Department of the Central Bank, in the absence of specific authorization from the Monetary Board, to make the necessary dollar exchange available for this purpose. After due consultations between this Department and the Central Bank the requisite authorization was finally granted by the Monetary Board on April 30, 1953. However, the Board has laid down the following procedure by which authorized contractors and/or importers of United States military agencies may be provided with their foreign exchange requirements:

A. Contractors desiring to import supplies and materials destined for use in U.S. military bases which are exempt from import licensing formalities and fee shall apply directly with the Exchange Control Department of the Central Bank for foreign exchange to pay for imports on E.C. Form No. 103. The application shall be accompanied by the following:

1. A certificate by the contracting officer of the U.S. military agency concerned containing the following information:

(a) That applicant the importer has been awarded a contract for the construction of a U.S. military project to be specified or for supplying commissary supplies and the amount involved;

(b) Bill of supplies, materials and equipment necessary for the contract which will be imported;

(c) The source of such supplies, materials and equipment;

(d) The local bank with which a letter of credit will be opened; and

(e) Approximate date of arrival of the importation.

2. Evidence of firm offer of the supplier showing unit price and total C & F or CIF value.

B. These applications will be processed by the Exchange Control Department of the Central Bank and if found in order an exchange license will be issued authorizing the contractor to open an L/C with his bank.

In his letter to this Department serving notice of the procedure above-out­lined, the Governor of the Central Bank has stated in part that he has instructed the Exchange Control Department under him to give priority to applications covering all imports destined for United States military agencies in order to avoid unnecessary delay in their procurement.

I would appreciate the early concurrence of Your Excellency's Government to tha above-outlined procedure, which together with this note shall be construed by my Government as a supplementary agreement to the notes on the same subject exchange between our respective Governments on December 29, 1952.

Accept Excellency, the renewed assurances of my highest consideration.

FELINO NERI
Acting Secretary

His Excellency R.A. SPRUANCE
Ambassador of the United States of America
Manila

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THE AMERICAN AMBASSADOR TO THE PHILIPPINE ACTING SECRETARY OF FOREIGN AFFAIRS

AMERICAN EMBASSY

No. 1313

Manila, June 17, 1953

Excellency:

I have the honor to refer to Your Excellency's note of May 29, 1953 which contained additional proposals for the implementation of Articles V and XVIII of the Military Bases Agreement, with particular reference to the procedures of the Philippine Central Bank.

I have discussed these proposals with the American military base com­manders, and am pleased to inform Your Excellency that they conform to our understanding of the staff level oral discussions on this subject.

This note, therefore, is the formal assurance of my Government that the conditions specified in Your Excellency's note under acknowledgment are acceptable and will be complied with by the United States military authorities concerned. This note together with Your Excellency's note of May 29, 1953 shall constitute an agreement between our two Governments supplementary to that contained in the exchange of notes on the same subject of December 29, 1952. Accept Excellency, the renewed assurances of my highest consideration.

R. A. SPRUANCE

The Honorable FELINO NERI
Acting Secretary of Foreign Affairs
Republic of the Philippines