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EMBASSY OF JAPAN

M A N I LA

Manila, June 13, 2018

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 (hereinafter referred to as " the Recipient" ) concerning Japanese economic cooperation to be extended with a view to promoting the economic and social development of the Republic of the Philippines. I have further the honour to propose on behalf of the Government · of Japan the following understanding:

1. ( 1) For the purpose of contributing to the implementation of the Project for Improving Flood Forecasting and Warning System for Cagayan de Oro River Basin (hereinafter referred to as " the Project") by the Recipient , the Government of Japan has decided that a grant up to one billion two hundred and seventy-eight million Japanese Yen (¥ 1,278,000,000) (hereinafter referred to as " the Grant " ) will be extended to the Recipient , subject to the relevant laws and regulations and budgetary appropriations of Japan .

(2) The Grant will be made available by concluding a grant agreement between the Recipient or its designated authority and the Japan International Cooperation Agency (JICA) (hereinafter referred to as "the G/A" ).

(3) The terms and conditions of the Grant as well as the procedures for its utilization will be governed by the G/A within the scope of the present understanding.

 

2. The Grant will be available during such period as may be specified in the G/A, provided that the period will be between the date of entry into force of the G/A and February 28, 2023. The period may be extended by mutual consent between the authorities concerned of the two Governments.

3 . The Grant shall be used by the Recipient properly and exclusively for the purchase of such products and/or services necessary for the implementation of the Project as may be specified in the G/A (hereinafter respectively referred to as the "Products" and the "Services" ) .

4. The Recipient or its designated authority shall enter into contracts in Japanese Yen with Japanese nationals for the purchase of the Products and/or the Services (The term "Japanese nationals" in the present understanding means Japanese physical persons or Japanese juridical persons controlled by Japanese physical persons and registered in Japan.). Such contracts will be verified by JICA to be eligible for the Grant.

5. The Grant will be executed by JICA, in accordance with the provision of the G/A, by making payments in Japanese Yen to an account to be opened in the name of Bangko Sentral ng Pilipinas on behalf of the Recipient at a bank in Japan designated by the Recipient or its designated authority .

6. ( 1 ) The Recipient shall, by itself or through its executing agencies, take necessary measures:

(a) to ensure that customs duties, internal taxes and other fiscal levies which may be imposed in the country of the Recipient with respect to the purchase of the Products and/or the Services be borne by its designated authority without using the Grant;

(b) to give due environmental and social consideration in the implementation of the Project ;

(c) to ensure that the Products and/or the Services be maintained and used properly and effectively for the implementation of the Project ;

(d) to secure (a) lot (s) of land necessary for the implementation of the Project and to clear the site (s) ;

(e) to provide facilities for distribution of electricity , water supply and drainage and other incidental facilities necessary for the implementation of the Project outside the site (s );

(f) to ensure prompt unloading, customs clearance and internal transportation in the country of the Recipient of the Products;

(g) to accord the Japanese physical persons and/or physical persons of third countries whose services may be required in connection with the supply of the Products and/or the Services such facilities as may be necessary for their entry into the country of the Recipient and stay therein for the performance of their work; and

(h) to bear all the expenses, other than those covered by the Grant, necessary for the implementation of the Project.

 

(2) Upon request, the Recipient shall provide the Government of Japan with necessary information on the Project.

(3) With regard to the shipping and marine insurance of the Products, the Recipient shall refrain from imposing any restrictions that may hinder fair and free competition among the shipping and marine insurance companies.

( 4) The Products and/or the Services shall not be exported or re-exported from the country of the Recipient.

 

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

I have further the honour to propose that this Note and Your Excellency's Note in reply confirming on behalf of the Recipient the foregoing understanding shall constitute an agreement between the two Governments, which shall enter into force on the date of Your Excellency's Note in reply.

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