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July 12, 1989
FINANCIAL PROTOCOL BETWEEN THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES AND THE GOVERNMENT OF THE FRENCH REPUBLIC
With a view to strengthening the ties of friendship and cooperation which bind them, the Government of the Republic of the Philippines and the Government of the French Republic have agreed to conclude the present protocol to foster the economic development of the Philippines.
ARTICLE 1 -EXTENT AND PURPOSE OF FINANCIAL SUPPORT
The French Government shall grant the Government of the Republic of the Philippines a loan designed to finance projects included in the development priorities of the Republic of the Philippines. The said support shall not exceed ONE HUNDRED AND FIFTY MILLION FRENCH FRANCS (150 MF) and shall be used to finance the purchase in France of French goods and services related to the purchase of five gas turbines of the National Power Corporation.
ARTICLE 2 - CONDITIONS GOVERNING CREDIT FACILITIES
The French loan shall be granted for a period of 26 years, including a grace period of 6 years. The interest rate shall be 5 % per year to which the insurance premium must be added. Said loan shall be repaid in 40 equal consecutive six-monthly instalments, the first instalment falling due 78 months after the end of the calendar year during which each drawing is made. Interest shall be payable on the total amount outstanding; it shall be applicable as of the date of each drawing on the French loan and shall be paid at six-monthly intervals.
An agreement between the department of finance acting on behalf of the Government of the Philippines or duly designated Government corporation guaranteed by the Government of the Philippines on the one hand and the financial institutions designated by the French government, acting on behalf of the French Government on the other hand, shall define the mechanisms of application and of repayment of the said loan.
ARTICLE 3 - IMPLEMENTATION DEADLINE AND EXPIRY DATE OF THE FRENCH TREASURY LOAN
In order to qualify for the financial support provided in Article 1 hereof, contracts must be concluded by December 31st 1989 at the latest;
No drawing on the French loan provided in Article 2 hereof shall be made after December 31st 1990.
The above dates shall not be extended except by special agreement between the two Governments in the event of exceptional difficulties.
ARTICLE 4 - CURRENCY OF ACCOUNT AND PAYMENT
All transactions under the terms of the present protocol shall be carried out in French francs.
ARTICLE 5 - FREIGHT AND INSURANCE
All contracts financed under the terms of the present protocol shall be invoiced exclusive of freight and insurance. Freight and insurance costs may, however, be financed by the use of the French loan insofar as:
- freight is provided under a bill of lading issued by a French shipping company and is certified by the French Merchant Wavy as being a French service,
- insurance is taken out with approved companies on the French market.
ARTICLE 6 - CONTRACTS COVERED
The final decision on whether contracts related to the projects referred to in Article 1 hereof qualify for financial support under the terms of the present protocol shall be made by exchange of letters between the Ministry of Finance of the Philippines and the Economic and Commercial Counsellor to the French Embassy in MANILA acting with the authorization of the competent French authorities.
ARTICLE 7 - TAXATION
The payments of principal and interest due on the credits provided by the present protocol shall not be liable to taxation in the Philippines.
In accordance with its international agreements, France may conduct post evaluations of the project mentioned in article 1, in order to appraise its impact on the development of the Philippines. The Government of the Republic of the Philippines agrees to welcome the appraisal mission from the French Government and to provide it with relevant information about the project.
ARTICLE 9 - DATE OF EFFECTIVENESS
The present protocol shall take effect at the date of its signature,
IN WITNESS THEREOF, the undersigned, authorised for this purpose by their respective Governments have signed this
Done in PARIS, The 12 July 1989 (in two originals, each in the English and French languages, the two texts equally authoritative).
For the Government of the
Republic of the Philippines,For the Government of
the Republic of France,(Sgd.) VICENTE R. JAYME
(Sgd.) PIERRE BEREGOVOY