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in an endeavour to act in accordance with the recommendations adopted during the meeting of the "Club de Paris" held on December 20, 1984, between representatives of the Philippine Government and representatives of certain creditor countries, including Switzerland,

have agreed on the following provisions:

  ARTICLE 1

The Central Bank of the Philippines (hereafter "Borrower") agrees to pay debts mentioned in this Agreement, and such obligations of the Borrower shall be unconditionally guaranteed by the Government of the Republic of the Philippines.

  ARTICLE 2

1. The present Agreement shall apply to the following Philippine debts in principal and interest resulting from commercial loans guaranteed by the Swiss Confederation with an original maturity of more than one year, and contracted prior to April 1, 1984, inclusive of

a) arrears on December 31, 1984, and

b) maturities falling due between January 1, 1985, and June 30, 1986.

2. The total amount of these maturities shall not exceed 25 million Swiss Francs. The maturities falling under this Agreement are specified in a separate list constituting an integral part of this Agreement.

  ARTICLE 3

The Philippine debts specified in Article 2 shall be paid as follows:

1. Regarding the amounts in principal and interest falling due on December 31, 1984, and not paid:

25 % on June 15, 1985

25 % on December 15, 1985

50 % on June 15, 1986.

2. a) Regarding the amounts in principal and interest falling due between January 1, 1985, and June 30, 1986, and not paid:

100 % of the amounts in principal and 60 % of the amounts in interest in 10 consecutive half-yearly payments, the first falling due on March 15, 1991, and the last on September 15, 1995.

b) The payment of the remaining 40% due in interest after the following maturity schedule:

- one third after the original maturity

- one third on September 15, 1986

- one third on September 15, 1987.

  ARTICLE 4

  The Borrower shall assume all the financial obligations deriving from the present Agreement as long as the original debtor is a public sector entity or has a guarantee from the Government of the Philippines or a financial public institution or corporation.

The Government of the Philippines, through the Borrower, shall enjoin private debtors to make deposits with the Central Bank of the Philippines in local currency equivalent to the amounts due by these debtors, according to original contractual obligations. The Borrower shall assume all the obligations related to the consolidation of the amounts due by private debtors, as long as the original maturities due have been paid in local currency. In case the original private debtor makes partial deposits in local currency, the Borrower will be liable only for the corresponding amounts. If the private debtor has not paid the maturities due in local currency, the Borrower is relieved of the corresponding obligation.

The Government of the Philippines shall guarantee all financial obligations assumed by the Borrower under the present Article.

  ARTICLE 5

  The Philippine Government shall pay interest on the outstanding debts. This interest shall be calculated from the date of the contractual maturity of these debts up to the date of their payment on the basis of 360 days/year and shall be paid to the Swiss bank to be specified on June 30 and December 31 of each year, for the first time on December 31, 1985. The accounting shall be made in the form of a current account every six months.

The rate of interest shall be 7 % per year.

  ARTICLE 6

  The payments foreseen in this Agreement shall be made in freely convertible Swiss francs by the Borrower to a Swiss bank which is to be specified.

  ARTICLE 7

  The payment obligation of the Borrower under this Agreement substitutes the payment obligation of original debtors. Other rights and obligations of individual creditors and debtors under their original contracts remain unaffected.

  ARTICLE 8

The Philippine Government shall undertake to grant Switzerland a treatment not less favourable than that granted to any other creditor country for the consolidation or rescheduling of debts of comparable terms.

  ARTICLE 9

  The present Agreement shall enter into force on the date of its signature.

In witness whereof the undersigned plenipotentiaries, duly authorized, have signed the present Agreement.

Done in two copies in Manila, on 29 November 1985, in English and French.

           

His Excellency Prime Minister C. Virata Ministry of Finance of the Republic of the Philippines Manila

  Dear Mr. Prime Minister 

Referring to the discussions held between officials of Switzerland and the Philippines on the rescheduling of the Philippine debts I would like, on behalf of my authorities to add the following precision to the Agreement on this matter signed on November 29, 1985.

"For the debts of the private sector included in the amounts mentioned in article 2 which are not covered by a payment guarantee issued by a Philippine public body, a curing period of up to three months from the signing date of this agreement for those payments that fell due before the signing date and from the original date of maturity for those payments falling due after the signing date shall be considered. Accordingly, only maturities for which peso deposits are made within such curing period shall be included in the present rescheduling agreement. Private sector debt for which deposits are not made within the curing period shall in principle be transferred as soon as the corresponding deposits have been executed."

I would be grateful if you could confirm your agreement to this provision. This letter and your answer would then constitute an addition to the Agreement mentioned above

Yours sincerely,

The Ambassador of Switzerland

(Sgd.) B. DE RIEDMATTEN

  29 November 1985

His Excellency
Ambassador B. de Riedmatten
Embassy of Switzerland
Republic of the Philippines

Dear Ambassador:

In reference to your letter of November 29, 1985 advising of the proposal of your authorities on the provision of a curing period for including delayed payments by private Philippine obligors in debt rescheduling as part of the Agreement between the Governments of the Republic of the Philippines and the Swiss Confederation on the rescheduling of Philippine debts, I am pleased to confirm our agreement with the language suggested by the Swiss authorities quoted as follows:

"For the debts of the private sector included in the amounts mentioned in Article 2 which are not covered by a payment guarantee issued by a Philippine public body, a curing period of up to three months from the signing date of this agreement for those payments that fell due before the signing date and from the original date of maturity for those payments falling due after the signing date shall be considered. Accordingly, only maturities for which peso deposits are made within such curing period shall be included in the present rescheduling agreement. Private sector debt for which deposits are not made within the curing period shall in principle be transferred as soon as the corresponding deposits have been executed."

Allow me to express our appreciation to your Excellency and your authorities for the understanding and cooperation extended towards concluding the Agreement between our two Governments on rescheduling of Philippine debts.

Sincerely yours,

(Sgd.) CESAR VIRATA
  Prime Minister
  and
  Minister of Finance

  MALACAÑANG

  MANILA
 
BY THE PRESIDENT OF THE PHILIPPINES

TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETINGS:

KNOW YE, that reposing special trust and confidence in the integrity, prudence and ability of:

H.E. CESAR VIRATA Prime Minister and Minister of Finance Republic of the Philippines

I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and laws of the Philippines, have named, designated and authorized Prime Minister Virata to conclude, sign, execute and deliver, for and in behalf of the Republic of the Philippines, the Agreement between the Government of the Republic of the Philippines and the Government of the Swiss Confederation covering the consolidated debt of the Philippines from Switzerland which shall include amounts of principal and interest due from January 1, 1985 up to June 30, 1986 inclusive, and not paid, resulting from commercial loans guaranteed by the Swiss Confederation with an original maturity of more than one year, concluded prior to April 1, 1984, including amounts on principal and interest on such debts due as at December 31, 1984 and not yet paid, and to make, execute, endorse and deliver any deed or document of whatsoever kind and nature which may be necessary for the purpose of implementing the Agreement and have vested Prime Minister Virata with full and all manner of power and authority for the purpose.

Prime Minister Virata is further granted full power and authority to do and perform every act and thing which may be requisite for the accomplishment of the special power herein granted as fully to all intents and purposes as the President might or could do if acting personally, hereby ratifying all that Prime Minister Virata shall lawfully do or cause to be done by virtue of these presents.

IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed.

DONE in the City of Manila, Philippines, this 9th day of August in the year of Our Lord, nineteen, hundred and eighty five.

  BY THE PRESIDENT:

(Sgd.) JUAN C. TUVERA
    Presidential Executive Assistant

LE CONSEIL FÉDÉRAL SUISSE FAIT SAVOIR PAR LES PRESENTES

qu' il a autorisé

Monsieur Bernard de Riedmatten, ambassadeur de Suisse aux Philippines, à signer 1'Accord entre le Gouvernement de la Confédération suisse et le Gouvernement de la République des Philippines concernant le rééchelonnement de dettes Philippines.

En foi de quoi, les présentes ont été signees par le Président et le Chancelier de la Confédération suisse et munies du sceau du Conseil federal.

Berne, le 22 mai 1985

 

AU NOM DU CONSEIL FEDERAL SUISSE

Le President de la Confederation:

(Sgd.)

Le Chancelier de la Confédération:

(Sgd.)

  Protocol

to the Agreement between the Philippines and Switzerland

concerning the rescheduling of Philippine debts

of December 20, 1984

  The Philippine Government and the Swiss Government have agreed to the following complementary provisions to the rescheduling Agreement of Philippine debts of December 20, 1984;

1. The enclosed list is authoritative for Swiss claims resulting from Philippine debts which are subject to consolidation. This list is an integral part of the present Protocol. It may be modified in common agreement of the two parties.

2. The Swiss bank designated to receive from the Central Bank of the Philippines payments according to Article 3 of the Agreement is the Union Bank of Switzerland in Zurich.

3. The Central Bank of the Philippines shall forward a copy of the payment orders to the Federal Office for External Economic Affairs in Berne and to the Export Risk Guarantee Office in Zurich.

4. The relevant addresses concerned with the implementation of the Agreement to which this Protocol refers are the following:

  On the Philippine side:

Management of External Debts & Investment
Account Department
Central Bank of the Philippines
Corner Vito Cruz and A. Mabini Street
 Metro Manila

Telex Address: MEDIAD
Telex No. 63343
 Answerback: CENBNK PN

On the Swiss side:

Federal Office for External Economic Affairs
Federal Department of Public Economy
 3003 Berne

Tel. 031 - 61 22 86 / 61 22 90
  Telex 911340 EDA CH for OFAEE

Export Risk Guarantee Office
  P.O. Box
  8032 Zurich

Tel. 01 - 47 66 54
  Telex 54924

Union Bank of Switzerland
  Export Financing Department
P.O. Box
  8021 Zurich

Tel. 01 - 234 11 11
  Telex 54461

                                          

For the Government of the Republic of the Philippines:	For the Government of the Swiss Confederation:
(Sgd.)	(Sgd.)
For the Central Bank of the Philippines:
(Sgd.)
Enclosures mentioned