Conformed Copy - L3204 - Small Coconut Farms Development Project - Amendment

Page 1 March 29, 1991 The Honorable Jesus P Estanislao Secretary of Finance Department of Finance Agrifina Circle, Ermita Metro Manila, Philippines Dear Secretary Estanislao: Philippines: Small Coconut Farms Development Project (Loan 3204-PH) Amendments to Loan Agreement We refer to the Loan Agreement (Small Coconut Farms Development Project) dated June 4, 1990, between the Republic of the Philippines (the Borrower) and the International Bank for Reconstruction and Development (the Bank). In response to your letter dated March 7, 1991, and pursuant to a new Bank policy designed to assist borrowers affected by the recent Middle East crisis by temporarily increasing the Bank share of project expenditures financed under Bank loans, we are pleased to inform you that the Bank has agreed to amend the Loan Agreement to read as set forth in the Annex to this letter. Please confirm your agreement to the foregoing by signing the form of confirmation on the attached copy of this letter and returning it to us. Sincerely yours, Gautam S. Kaji Director Country Deparument II Asia Region Attachment CONFIRMED: REPUBLIC OF THE PHILIPPINES By: Authorized Representative DATE: 24 April 1991 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Page 2 Category SDR Equivalent) to be Financed (1) Works 3,400,000 90% (2) Vehicles and 4,600,000 100% of foreign spare parts expenditures, 100% of local expendi- tures, (ex-factory cost) and 80% of local expenditures for other items procured locally (3) Equipment and 3,200,000 100% of foreign spare parts expenditures, 100% of local expendi- tures, (ex-factory cost) and 85% of local expenditures for other items procured locally (4) Consultants' services 5,300,000 100% training, studies and extension (5) Research 300,000 100% (6) Copra driers 4,400,000 90% (7) Farm inputs 82,000,000 100% of foreign expenditures, 100% of local expendi- tures, (ex-factory cost) and 75% of local expenditures for other items procured locally (8) Incremental operating costs (a) 3,000,000 90% (b) 2,100,000 45% (c) 1,700,000 30% (d) 1,800,000 25% (5) Unallocated 10,000,000 ___________ TOTAL 121,800,000 =========== 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; and (c) the term "incremental operating costs" means expenditures for incremental staff salaries and benefits, travel allowances, office expenses and vehicle maintenance and operation. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; (b) payments in respect of Category (6) of this Schedule for copra driers until a Page 3 satisfactory plan, for the implementation of a pilot scheme to introduce improved drying practices in major oil mill catchments, has been received by the Bank; (c) expenditures under Category (8) (b) until $3,000,000 under Category (8) (a) is fully disbursed; (d) expenditures under Category (8) (c) until $2,100,000 under Category (8) (b) is fully disbursed; and (e) expenditures under Category (8) (d) until $1,700,000 under Category (8) (c) is fully disbursed.