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April 07, 1999

The First Joint Commission Meeting (JCM) between the Republic of the Philippines and the Kingdom of Saudi Arabia was held on 5-8 April 1999 in Manila, Republic of the Philippines. The Philippine side was headed by Hon. Rosario G. Manalo, Undersecretary for International Economic Relations, Department of Foreign Affairs, and H.E. Ambassador Dr. Yousef bin Terad Al-Saadoun, Assistant Deputy Minister for Economic and Cultural Affairs, Ministry of Foreign Affairs, headed the Saudi Arabian delegation.

The list of delegates from both sides is attached as Annex 1.

During the opening session, the head of the Philippine delegation, Hon. Undersecretary Rosario G. Manalo, welcomed the Saudi Arabian delegation and gave a comprehensive review of Philippine-Saudi Arabian bilateral relations. Furthermore, she outlined the expectations of the Philippine side from the Meeting, particularly initiatives to further develop and strengthen bilateral relations between the two countries. In reply, the head of the Saudi Arabian delegation, H.E. Ambassador Dr. Yousef bin Terad Al-Saadoun, also reviewed Saudi Arabian-Philippine economic relations from his perspective and expressed optimism that the two countries have the potential to expand areas of cooperation.

The Meeting approved and adopted the Provisional Agenda attached as Annex 2.

The two sides agreed to divide the Meeting into three (3) Sub-Committees, namely:

1. Sub-Committee on Economic, Trade, Investment, Agriculture, Industrial and Manpower Cooperation.

2. Sub-Committee on Cultural, Educational, Health, Information, Sports and Youth Cooperation

3. Sub-Committee on Technical and Communication Cooperation.

Sub-Committee 1: Economic, Trade, Investment, Agriculture, Industrial and Manpower Cooperation

1. Both sides agreed on the importance of expanding bilateral trade between the two countries. They called for more efforts at organizing more trade missions, fairs and exhibits-between the private sector of the two countries.

2. Both sides agreed to pursue investment promotion efforts by enhancing the exchange of information on investment laws and opportunities of each country to encourage more investments. The Saudi side informed the Philippine side that Saudi Arabia would adopt a new foreign investment law which will soon be enacted. The Philippine side provided the Saudi side copies of Philippine investment laws in order to increase awareness of the investment opportunities in the country.

3. Both sides called for the conclusion of the Investment Promotion and Protection Agreement between the two countries. The two sides also expressed the importance of starting negotiations on the Agreement on the Avoidance of Double Taxation.

4. Both sides strongly recommended that a Joint Business Council be established among businessmen of both countries to facilitate greater contact between the private sector. The Philippine Chamber of Commerce and Industry and the Council of the Saudi Chambers of Commerce and Industry can jointly pursue this initiative.

5. The Philippine side requested the reduction of customs tariffs on bananas, cigarettes and tobacco products and the lifting of the importation ban on fresh and sliced coconut products (including dessicated coconuts), and fresh/frozen marine products. The Saudi side explained that the current level of tariffs imposed on cigarettes and tobacco products are due to health reasons and the ban on Philippine coconut and marine products is due to the advisories issued by international organizations.

6. The Philippine side recommended that a policy of selective accreditation be adopted for Philippine exporters of coconut and marine products since not all areas in the country are affected by the disease. The Saudi side agreed to refer the Philippine proposed selective accreditation to the Saudi Ministry of Agriculture for consideration and to provide the Philippine side with the rules and regulations on Saudi Arabia's importation of marine and coconut products from the Philippines. The Philippine side extended an invitation to the government and private sector of Saudi Arabia to visit the Philippines and observe the protocol on cadang-cadang research and the manufacture of dessicated coconuts.

7. The Saudi side requested the support of the Philippine side for Saudi Arabia's accession to the WTO. The Philippine side gave its assurances that the matter will be given its serious consideration.

8. The Philippine side presented to the Saudi side the project proposals of the Department of Energy and its attached agencies, Philippine National Oil Company, and the National Power Corporation: 1) supply of feedstock to the proposed Naphtha cracker plant 2) equity investments in the Naphtha cracker plant 3) possible investment in a low density polyethylene LDPE and styrene monomer plants 4) technical assistance on the exploration of natural gas in the lloilo basin in Panay Island and 5) access to scientific and technological developments significant to power grid management. The Saudi side took note of the proposals and would refer these proposals to the appropriate Saudi private sector.

9. The Philippine side presented proposals on agriculture, specifically on a joint study on the effects of oil rigs on fishery resources, training on aquaculture and oil polluted waters, training and exchange of expertise on pest and disease control of agricultural crops, establishment of a national animal health and production information system, sending of mission from the Philippines to demonstrate the various uses of coconut coir products in agriculture production and infrastructure projects and technical cooperation in the implementation of a technology-oriented coconut-based fanning system in SZOPAD and ARMM. The Saudi side expressed willingness to accept these proposals for consideration of concerned Saudi authorities.

10. The Philippine side presented two (2) project proposals, i.e. Sibuco-Lunday-Curuan Road and Jolo Ring Road for possible funding from the Saudi Fund for Development. The Saudi side recommended that the Philippine proposals and other related projects and feasibility studies be immediately submitted to the Saudi Fund for Development for their consideration.

11. The Philippine side presented and offered its programs on technical education and skills development including industrial training requirements. The Saudi side welcomed the offer as one of its concerns is the training of medical personnel and preventive maintenance of hospital equipments and facilities.

12. The Philippine side expressed its desire to discuss various areas related to labor such as: recruitment and deployment procedures, visa requirements, direct hiring system, the Philippine Development Resource Center, the review and improvement of the present employment contract, and the proposed establishment of a Joint Manpower Commission which can facilitate the discussion or possible resolution of the issues with the concerned Saudi ministries. The Saudi side expressed the view that it is not in favor of creating a separate Joint Manpower Commission and asserted mat the labor-related issues should be discussed with the private sector, i.e. the Council of Saudi Chambers of Commerce and Industry and promised to forward the Philippine demand to the concerned ministries.

Sub-Committee 2: Culture, Education, Information, Sports And Youth Cooperation

1. Both sides agreed to exchange visits between professors and officials in higher education, and exchange of expertise and joint research.

2. Both sides agreed to exchange information relative to school and university certificates, names of government and private universities and the degrees they award, and exchange of university scientific magazines and periodicals.

3. Both sides agreed to exchange information about health colleges, institutes and training.

4. The Philippine side submitted a draft memorandum of understanding between the Commission on Higher Education and the Ministry of Higher Education, which the Saudi side agreed to submit to authorities concerned,

5. The Philippine side requested that the Saudi side recognize the advisory role of the Philippine Ambassador in Philippine schools in the KSA, and sought clarification on the regulations regarding the involvement of the Ministry of Education in the supervision of foreign schools in the Kingdom. The Philippine side also proposed that the establishment of Philippine schools in the KSA and appointment of teachers be coursed through the Philippine Embassy/Consulate for proper endorsement and accreditation by the Philippine agency concerned. The Philippine side also proposed that school calendar of these schools be synchronized with the Philippine-based schools calendar. The Saudi side took note of these proposals and agreed to submit these matters before the authorities concerned.

6. Both sides agreed to regularly exchange information on the developments occurring in policies and regulations affecting the establishment, operations, and management of such schools for purposes of effective coordination.

7. Both sides agreed to the holding of book exhibitions, cultural weeks, arts and crafts exhibitions, and exchange visits between officials in the field of sports and youth.

8. Both sides agreed to cooperate in the field of sports and youth by coordination of positions in the international sports bodies.

9. Both sides agreed to forge cooperation between Saudi Press Agency and the Philippine Information Agency on common interests.

10. Both sides agreed to exchange visits of official delegations in the fields of common interests.

11. Both sides agreed to cooperate in holding training sessions for imams and preachers (ustadz) in the Philippines.

12. The Philippine side agreed to the Saudi willingness to contribute in the development of Islamic educational institutions (madaris) in the Philippines.

13. Both sides recognized the Saudi expertise in the administration and investment of Islamic endowments, with KSA providing information pertinent to these matters to help the Philippine side manage its Islamic endowments.

14. The Philippine side agreed to the Saudi willingness to provide the Philippines with necessary publications and audio-visuals to be broadcast and distributed before departing for the annual Haj season to ensure that Filipino pilgrim understand the Haj rituals, and to facilitate orderly movement of pilgrims at Holy sites.

Sub-Committee 3: Technical and Communication Cooperation

1. The Saudi side expressed its desire to benefit from Philippine expertise in the area of hospital management operation and maintenance of hospitals and medical centers. The Philippine side welcomed this initiative and promised to raise this matter with the concerned authorities.

2. The Saudi side expressed its interest in exchanging information on Philippine expertise in the area of manufacturing medical equipment and its supporting services (electricity, water, environmental protection, etc.). The Philippine side agreed to raise this matter with the concerned Philippine authorities.

3. The Saudi side expressed its interests for further cooperation in standardization and conformity assessment procedures to facilitate the exchange of goods and services between the two countries.

4. The two sides recommended harmonizing their national standards with international standards, where appropriate, through exchange of information on standards, technical regulations, conformity assessment procedures, physical metrology and calibration. In this regard, both sides recognized the importance of developing their respective standard and conformance technical infrastructure. They also recommended to engage in technical cooperation through the SASO and the Philippine Bureau of Product Standards (BPS) arrangement. The technical cooperation will include visits, exchange of experts and training in the field required by the country concerned. The Philippine side welcomed the training of SASO staff in the fields which are of SASO's interests, and the dispatch of short term experts in the fields which the Philippine Bureau of Product Standards has the required technical expertise.

5. The two sides recognized the impact of international standardization in eliminating technical barriers to trade. In this regard, the two sides recommended the exchange of experiences and views on the development of international standards. Best efforts will be exerted by the two sides to formulate common stands and positions in relevant international bodies and fora.

6. The Saudi side expressed its interest to benefit from Philippine expertise in maritime transportation and information/computer technology. In this regard, the two sides recommended to exchange information and visits of experts in the areas of maritime transportation and information/computer technology.

7. The two sides recommended closer cooperation in the field of postal services through direct discussion, specially on matters pertaining to EMS inquiries and settlements of accounts.

8. The two sides recognized the importance of having international roaming services between both countries, and therefore recommended to expedite the implementation of these roaming services.

9. The two sides recommend to exchange experiences in the field of privatization of telecommunication services sectors.

10. The Saudi side informed the Philippine side that three (3) rounds of talks have been held to conclude an Agreement on Reciprocal Exemption of Taxes and Customs Duties on the Activities of Air Transport Enterprises Between the Government of the Republic of the Philippines and the Kingdom of Saudi Arabia. The Saudi side expressed its desire to implement the Agreed Minutes of the third round of negotiations held on 8-9 July 1991 in which both parties agreed that the Philippine side would reduce taxes on income derived from international air transport from 2.5% to 1.5%, and in return the Philippine Airlines (PAL) would be allowed to pay its obligations in installment basis. The Philippine side clarified that the reduction of taxes on income derived from international air transport from 2.5% on Philippine gross billings to 1.5% cannot be implemented unless a treaty is formally signed and ratified by both countries.

11. The Saudi side expressed its desire to conclude an Agreement on Reciprocal Exemption of Taxes and Customs Duties on the Activities of Air Transport Enterprises Between the Government of the Republic of the Philippines and the Kingdom of Saudi Arabia, and requested that negotiations be held during the second half of 1999 for the purpose of the early conclusion of this Agreement. The Philippine side agreed to refer the matter to the concerned agency, and inform the Saudi authorities, through diplomatic channels, of the proposed dates and venue for the negotiations.

12. The Saudi side expressed its concern that (1) the recent increment on air navigation charges, and (2) the imposition of sales tax on all tickets and airway-bills in flights to and from the Republic of the Philippines would affect the profitability of the airlines and increase operational costs, forcing airlines to reduce or suspend air services. The Saudi side requested (1) the suspension of the increment on air navigation charges and (2) the application of the common carrier tax only on net sales. The Philippine side agreed to refer the matter to the concerned authorities for further direct discussions at a date mutually agreed upon.

CONCLUSION

Both sides expressed their satisfaction with the successful conclusion of this First Joint Commission Meeting and the potential of strengthening further bilateral economic cooperation between the two countries in all mutually beneficial fields. Both sides agreed to accelerate the implementation of the initiatives and projects identified during the discussions. It was also agreed that each side would prepare a periodical report to record the progress in implementing the recommendations contained in the minutes of the First Joint Commission Meeting. The reports shall be exchanged through diplomatic channels.

The Saudi Arabian side expressed appreciation for the generous hospitality accorded to the delegation and the excellent arrangements made by the Government of the Republic of the Philippines for the Joint Commission Meeting.

Both sides agreed to hold the Second Meeting in Riyadh, Kingdom of Saudi Arabia, at a date mutually agreed upon.

Signed on 7 April 1999 in Manila, Republic of the Philippines.

FOR THE GOVERNMENT OF THE REPUBLICOF THE PHILIPPINES:	FOR THE GOVERNMENT OF THE KINGDOM OF SAUDI ARABIA:
(Sgd.) Hon. Mrs. Rosario G. Manalo	(Sgd.) H.E. Dr. Yousef T. Al-Saadoun
Undersecretary for International Economic Relations Department of Foreign Affairs	Assistant Deputy Minister for Economic and Cultural Affairs Ministry of Foreign Affairs