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November 06, 1984

Excellency,

I have the honour to refer to the recent discussions held between the representatives of the Government of Japan and of the Government of the Republic of the Philippines concerning the supply of equipment for information science (hereinafter referred to as "the Equipment") to the National Science and Technology Authority, and to propose on behalf of the Government of Japan the following arrangements:

For the purpose of promoting science education in the Republic of the Philippines, the Government of Japan will ex-tend to the Government of the Republic of the Philippines, in accordance with the relevant laws and regulations of Japan, a grant up to thirty-nine million yen (¥ 39,000,000) (hereinafter referred to as "the Grant").

The Grant will be used by the Government of the Republic of the-Philippines properly and exclusively for the purchase of the Equipment, which will be products of Japan, and of services necessary for the transportation of the Equipment to ports in the Republic of the Philippines.

The Grant will be made available during the period between the date of coming into force of the present arrangements and March 31, 1985, unless the period is extended by mutual agreement between the authorities concerned of the two Governments.

(1) The Government of the Republic of the Philippines or its designated authority will enter into contracts in Japanese yen with Japanese nationals or Japanese juridical persons controlled by Japanese nationals for the purchase of1the Equipment and services referred to in paragraph 2. Such contracts shall be verified by the Government of Japan to be eligible for the Grant.

(2) The Government of the Republic of the Philippines or its designated authority will open through banking arrangements an account to be used only for the purpose of the implementation of the Grant, in the name of the Government of the Republic of the Philippines in an authorized foreign exchange bank of Japan designated by the Government of the Republic of the Philippines or its designated authority.

(3) The Government of Japan wi11 make payments in Japanese yen to cover the obligations incurred by the Government of the Republic of the Philippines or its designated authority under the verified contracts referred to in sub-paragraph (1) above to the account referred to in sub-paragraph (2) above, when payment requests are presented by the bank referred to in sub-paragraph (2) above to the Government of Japan under an authorization to pay issued by the Government of the Republic of the Philippines or its designated authority.

The Government of the Republic of the Philippines will take necessary measures: ;

(a) to ensure prompt unloading and customs clearance at ports of disembarkation in the Republic of the Philippines and internal transportation therein of the Equipment;

(b) to exempt Japanese nationals or Japanese juridical persons controlled by Japanese nationals from customs duties, internal taxes and other fiscal levies which may be imposed in the Republic of the Philippines with respect to the supply of the Equipment and services under the Grant;

(c) to ensure proper and effective maintenance and use of the Equipment; and

(d) to bear all the expenses, other than those to be borne by the Grant, necessary for the implementation of the Grant.

I have further the honour to propose that the present Note and Your Excellency's Note in reply confirming on behalf of the Government of the Republic of the Philippines the foregoing arrangements shall be regarded as constituting an agreement between the two Governments, which will enter into force on the date of Your Excellency's reply.

I avail myself of this opportunity to renew to Your Excellency the assurance of my highest consideration.

(Sgd.)YOSHIO OKAWA

Ambassador Extraordinary and Plenipotentiary of Japan to the Republic of the Philippines

HIS EXCELLENCY ARTURO M. TOLENTINO

Minister for Foreign Affairs

Ministry of Foreign Affairs