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June 20, 1996

ARTICLE I
NATURE OF THE MEMORANDUM OF UNDERSTANDING

Section 1.01

This Memorandum of Understanding constitutes an arrangement pursuant to the objectives and purposes of the General Agreement on Development Cooperation between CANADA and the PHILIPPINES dated 13th day of November 1987 and is intended to set out the responsibilities of the two governments in relation to the Project.

ARTICLE II
RESPONSIBLE AUTHORITIES

Section 2.01

CANADA designates the Canadian International Development Agency (hereinafter called "CIDA" ) as the agency responsible for the implementation of its obligations under this Memorandum of Understanding.

Section 2.02

The PHILIPPINES designates the National Economic and Development Authority (hereinafter called "NEDA") as the agency responsible for the implementation of its obligations under this Memorandum of Understanding.

ARTICLE III
THE PROJECT

Section 3.01

CANADA and the PHILIPPINES shall participate in a project to be known as Commodity Assistance Program III to provide the Philippines with Canadian commodities (hereinafter called the "Project"). The project shall provide Canadian goods to generate a Development Counterpart Fund which will be used in accordance with the provisions of the Memorandum of Understanding (MOU) dated 19 December 1988 establishing the Canada-Philippines Development Counterpart Fund. This was originally established to promote improved governance at the local level; address capacity building of key institutions and support Philippines private sector development.

This counterpart fund MOU has a duration of ten years and will need to be extended or modified to cover the reception of all funds under the Project. Some Canadian goods supplied will also directly support programs aimed at supporting the Philippine Government's Social Reform Agenda and/or satisfying basic human needs. The Project is more completely described in Annex "A" attached hereto.

Section 3.02

Procurement of the commodities relating to the Project shall be performed with the assistance of a Canadian and a local procurement advisor(s)/monitor(s) provided by CANADA as set forth in Annex "D",

Section 3.03

Procurement of the commodities relating to the project shall be supplied from Canadian suppliers. The Canadian government content regulations for the commodities supplied under the Project will apply. The obligation of satisfying CANADA that these content requirements are being met is the responsibility of the Canadian exporter.

ARTICLE IV
CONTRIBUTION OF CANADA

Section 4.01

The contribution of Canada shall consist of the procurement, financing and shipping of Canadian commodities to a Philippine port of entry identified by the Government of the Philippines as well as the provision of professional services of a Canadian and local procurement advisor(s)/monitor(s), and of a Canadian consultant to evaluate the Project, all as more particularly set forth in Annexes "A" and "B". The total value of CANADA'S contribution shall not exceed Fifteen Million Canadian Dollars (Cdn $ 15,000,000).

Section 4.02

The Canadian contribution shall not be used by the PHILIPPINES to pay taxes, fees, customs duties or any other levies such as value added tax charges imposed directly or indirectly by the PHILIPPINES on any goods, equipment, vehicles and services purchased or acquired for, or related to, the execution of the Project.

ARTICLE V
CONTRIBUTION OF THE PHILIPPINES

Section 5.01

The contribution of the PHILIPPINES shall consist of the provision of qualified personnel, facilities, services and other Project requirements, all as more particularly set forth in Annex "C".

ARTICLE VI
INFORMATION

Section 6.01

CANADA and the PHILIPPINES shall ensure that this Memorandum of Understanding is carried out with due diligence and efficiency and each shall furnish to the other all such information relating to the Project as shall reasonably be requested.

ARTICLE VII
COMMUNICATIONS

Section 7.01

Any communications or documents given, made or sent by either CANADA or the PHILIPPINES pursuant to this Memorandum of Understanding shall be in writing and shall be deemed to have been duly given, made or sent to the party to which it is addressed at the time of its delivery by hand, mail, telegram, cable, facsimile or telex at its respective address, namely:

For the PHILIPPINES:
Mail Address:The Director General
National Economic and Development Authority (NEDA)
Ambers Avenue
Pasig, Metro Manila

Philippines

Cable Address: NEDAPHIL
Telex29058

Fax631-3747

For CANADA:
Mail Address : The President
Canadian International Development Agency
c/o Head of Aid, Development Assistance Section
Canadian Embassy
11th Floor, Allied Bank Center
6754 Ayala Avenue
Makati City
Philippines.

Fax:810-5142

Section 7.02

Any one of the parties hereto may, by written notice to the other party hereto, change address to which any notice or request shall be sent.

Section 7.03

All communications and documents submitted to CANADA shall be in either the English or the French language, and those submitted to the PHILIPPINES shall be in the English language.

ARTICLE VIII
INTERPRETATION

Section 8.01

Differences which may arise in the application of the provision of this Memorandum of Understanding shall be settled by means of negotiations between CANADA and the PHILIPPINES or by any other manner mutually agreed upon by their respective Governments.

ARTICLE IX
ENTIRE UNDERSTANDING

Section 9.01

This Memorandum of Understanding together with Annexes "A", "B", "C" and "D" which form an integral part hereof constitutes the entire understanding between the parties with respect to the Project.

ARTICLE X
CONSULTATION

Section 10.01

CANADA and the PHILIPPINES will endeavour to consult each other in respect of any matter that may arise from time to time in connection with the Memorandum of Understanding

ARTICLE XI
GENERAL PROVISIONS

Section 11.01

In connection with the contribution of Canada for the purchase and delivery of Canadian commodities pursuant to this Memorandum of Understanding, the PHILIPPINES agrees to undertake all reasonable precautions to avoid:

a) diverting any shipment to non-Philippine destinations or re-exporting the Canadian commodities received under this contribution; and

b) utilising any shipment of Canadian commodities under this contribution for military purposes

 

Section 11.02

This Memorandum of Understanding shall come into force and effect on the date of signature and shall expire on the 31st day of March 2000. This Memorandum of Understanding may be amended from time to time, as deemed necessary, by mutual agreement through an exchange of letters.

IN WITNESS WHEREOF, the undersigned have signed this Memorandum of Understanding in duplicate in Manila,Philippines on the 20th day of June 1996.