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July 23, 1982

1. For the purpose of contributing to the execution of the Offshore Mineral Exploration Project (hereinafter referred to as "the Project") by the Government of the Republic of the Philippines, the Government of Japan will extend to the Government of the Republic of the Philippines, in accordance with the relevant laws and regulations of Japan, a grant up to two billion one hundred and forty million yen (¥2,140,000,000) (hereinafter referred to as "the Grant").

2. The Grant will be made available during the period between the date of coming into force of the present arrangements and March 31, 1983, unless the period is extended by mutual agreement between the authorities concerned of the two Governments.

  3. (l) The Grant will be used by the Government of the Republic of the Philippines properly and exclusively for the purchase of the products of Japan and the services listed below:

(a) a survey vessel;

(b) survey equipment; and

(c) services necessary for the transportation of the products referred to in (a) and (b) above to ports in the Republic of the Philippines.

(2) Notwithstanding the provisions of sub-paragraph (l) above, when the two Governments deem it necessary, the Grant may be used for the purchase of the products of the kind mentioned in (b) of sub-paragraph (l) above, which are products of countries other than Japan. 4. The Government of the Republic of the Philippines or its designated authority will enter into contracts in Japanese yen with Japanese nationals for the purchase of the products and services referred to in paragraph 3. Such contracts shall be verified by the Government of Japan to be eligible for the Grant. (The term Japanese nationals whenever used in the present arrangements means Japanese physical persons or Japanese juridical persons controlled by Japanese physical persons.)

5. (l) The Government of Japan will execute the Grant by making payments in Japanese yen to cover the obligations incurred by the Government of the Republic of the Philippines or its designated authority under the contracts verified in accordance with the provisions of paragraph 4 (hereinafter referred to as "the Verified Contracts") to an account to be opened 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 (hereinafter referred to as "the Bank").

(2) The payments referred to in sub-paragraph (l) above will be made when payment requests are presented by the Bank to the Government of Japan under an authorization to pay issued by the Government of the Republic of the Philippines or its designated authority.

(3) The sole purpose of the account referred to in sub-paragraph (l) above is to receive the payments in Japanese yen by the Government of Japan and to pay to the Japanese nationals who are parties to the Verified Contracts The procedural details concerning the credit to and debit from the account will be agreed upon through consultation between the Bank and the Government of the Republic of the Philippines or its designated authority.

6. (l) 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 products purchased under the Grant;

(b) to assume, by itself or through its executing agency or instrumentality, all customs duties, internal taxes and other levies which may be imposed in the Republic of the Philippines on Japanese nationals with respect to the supply of the products through its executing agency or instrumentality, all customs duties, internal taxes and other fiscal levies which mad services "under the Verified Contracts;

(c) to accord Japanese nationals whose services may be required in connection with the supply of the products and services under the Verified Contracts such facilities as may be necessary for their entry into the Republic of the Philippines and stay therein for the performance of their work;

(d) to ensure that the products purchased under the Grant be maintained and used properly and effectively for the execution of the Project; and

(e) to bear all the expenses, other than those to be borne by the Grant, necessary for the execution of the Project.

7. The two Governments will consult with each other in respect of any matter that may arise from or in connection with the present arrangements.

                       

	(Sgd.)HIDEHO TANAKA
	Ambassador Extraordinary & Plenipotentiary
	of Japan to the Republic of the Philippines