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June 07, 1999

The Governments of the Republic of the Philippines and the Republic of Korea, on the occasion of the state visit of His Excellency President Joseph Ejercito Estrada to the Republic of Korea on 6 — 9 June 1999 upon the invitation of His Excellency President Kim Dae-jung, take note of the recent developments in their efforts to establish in Cavite, the Philippines, the Korea-Philippines Friendship Hospital (hereinafter referred to as the "Hospital"), and express their respective commitments to the establishment of the Hospital as follows:

1. The Government of the Republic of Korea, having examined the proposals for financial assistance submitted by the Government of the Republic of the Philippines during the first half of 1999, has chosen to fund the establishment of the Hospital;

2. The Korea International Cooperation Agency (hereinafter referred to as "KOICA") will be responsible for the implementation of the project on behalf of the Government of the Republic of Korea; whereas the Provincial Government of Cavite (hereinafter referred to as "PGC") will be responsible for the implementation of the project on behalf of the Government of the Republic of the Philippines;

3. The Government of the Republic of Korea will, in accordance with the laws and regulations of the Republic of Korea, provide the project with a grant of up to three-million-and-eight-hundred-thousand US dollars (US$ 3,800,000.00) over a period of three (3) years starting in 1999 including the following:

a. Construction of a building for the Hospital;

b. Provision of medical equipment and other supplies;

c. Dispatch of Korean experts to the Hospital; and

d. Training, as necessary, of Filipino medical and other working staff in Korea.

4. The Government of the Republic of the Philippines will bear the costs of unloading, inland transport, and insurance for all equipment and supplies delivered by the Government of the Republic of Korea from the port of discharge to the project site, as well as exempt all such equipment and supplies from harbor duties, import duties and other public charges;

5. The PGC will set aside an appropriate plot of land within the compound of the existing Cavite Provincial Hospital for the exclusive use of the Hospital. The PGC will also provide medical and working staff for the Hospital and bear all its operational costs;

6. It is understood that the Hospital shall be a non-profit organization with maximum autonomy in budgeting, staffing, procurement, pricing and any other administrative activities. The medical services dispensed by the Hospital will be readily available to the Filipino people at no charge or at the lowest cost possible; and

7. KOICA will dispatch during 1999 both a preliminary survey team and an implementation survey team to the Philippines to conduct an in-depth study of the project. Based on this study, KOICA and PGC will conclude a Record of Discussion (ROD), setting out the specific and technical aspects relating to the establishment and operation of the Hospital. Conclusion of the ROD will be followed by an intergovernmental arrangement to be worked out between the relevant authorities of both governments.

Done in duplicate in Seoul this 7th day of June 1999, in the English language.