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MEMORANDUM OF UNDERSTANDING BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FOR THE TELECOMMUNICATIONS IMPORT SUPPORT PROJECT (PROJECT NUMBER: 734/14576)

The Government of Canada (hereinafter called "CANADA") and the Government of the Republic of the Philippines (hereinafter called the "PHILIPPINES"), desiring to record an understanding concerning a Canadian development assistance project to the PHILIPPINES entitled "Telecommunications Import Support Project" have agreed as follows:

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 the 13^th  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 Department of Transportation and Communications (hereinafter called "DOTC") 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 the Telecommunications Import Support Project (hereinafter called the "Project").  The purpose of the Project is to contribute to the economic growth and regional development of the Philippines by assisting the PHILIPPINES in acquiring telecommunications technology from Canada.  The Project is more particularly described in Annex "A" hereto.

ARTICLE IV
  CONTRIBUTION OF CANADA

SECTION 4.01

For the purpose of the Project which will include monitoring and evaluation, CANADA shall make available to the PHILIPPINES, a contribution in an amount not to exceed fifteen million Canadian dollars (Cdn $15,000,000), (hereinafter called the "Contribution").

SECTION 4.02

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

ARTICLE V
  CONTRIBUTION OF THE PHILIPPINES

SECTION 5.01

The PHILIPPINES shall, subject to its normal budgetary process, provide or cause to be provided, as needed, all resources which may be required to implement this Memorandum of Understanding and the Project.  The responsibilities of the Philippine Executing Agency are detailed in Annex "B".

ARTICLE VI
  USE OF THE CONTRIBUTION OF CANADA 

SECTION 6.01

The Contribution will be used for financing thirty- five percent (35%) of the contract price of each transaction described in Annex A, in parallel with the line of credit made available to the PHILIPPINES by the Export Development Corporation of Canada (hereinafter referred to as "EDC").

SECTION 6.02

The procedures for procurement of and payment for any goods, equipment and services to be purchased or acquired with the Contribution shall be those set forth in Annex C.

SECTION 6.03

Goods, equipment and services purchased or acquired with the Contribution shall have an overall Canadian content of not less than sixty percent (60%).

ARTICLE VII
  CANCELLATION AND SUSPENSION

SECTION 7.01

CANADA may, after consultation with the PHILIPPINES, suspend fully or in part the availability of the Contribution should one of the following cases occur:

a) the PHILIPPINES has failed or is unable to meet its obligations under this Memorandum of Understanding; or

b) the financing provided in parallel by the EDC has been suspended or cancelled.

SECTION 7.02

If the full amount of the Contribution made available by CANADA is not committed within two years from the date of signing of this Memorandum Of  Understanding or the date upon which the EDC Line of Credit Agreement becomes effective, whichever date is later, the balance will be cancelled, unless modified by mutual agreement.

ARTICLE VIII
  GENERAL UNDERTAKING

SECTION 8.01

The PHILIPPINES and CANADA shall ensure that the Project is carried out with due diligence and efficiency.

SECTION 8.02

The PHILIPPINES and CANADA shall cooperate fully to ensure that the Project will be accomplished, and each shall furnish to the other all such information as shall reasonably be requested with regard to the Contribution, the Project and any matter relating thereto. The PHILIPPINES shall advise CANADA as soon as possible of any condition or contingency which interferes with, or threatens to interfere with, the accomplishment of the Project.

SECTION 8.03

Accredited representatives of CANADA may, at suitable times and with prior consultation with the PHILIPPINES, visit project sites in the Philippines for the purpose of any matter related to this Memorandum of Understanding.

ARTICLE IX
  COMMUNICATIONS

SECTION 9.01

Any communications or documents given, made or sent by either the PHILIPPINES or CANADA 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, telex or facsimile at its respective address, namely: 

SECTION 9.02

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

SECTION 9.03

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 X
  INTERPRETATION

SECTION 10.01

Differences which may arise in the application of the provisions 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 XI
  ENTIRE UNDERSTANDING

SECTION 11.01

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

ARTICLE XII
  CONSULTATION

SECTION 12.01

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

ARTICLE XIII
  GENERAL PROVISIONS

SECTION 13.01

This Memorandum of Understanding shall come into force and effect on the date of signature and shall expire on the 31st day of March 1996. 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 Ottawa, Canada on the 7^th day of November, 1989.