Conformed Copy - TF022728 - Strengthening Social Protection - ASEM Trust Fund Grant

Page 1 August 20, 1999 Hon. Edgardo Espiritu Secretary Department of Finance Manila Republic of the Philippines Re: ASEM Trust Fund Grant for Strengthening Social Protection Grant TF022728 Dear Sir: I am writing on behalf of the International Bank for Reconstruction and Development (the Bank) to indicate the Bank's agreement, as administrator of grant funds provided from the ASEMEU Asian Financial Crisis Response Fund, to make a grant in an amount not exceeding nine hundred thousand dollars ($900,000) (the Grant) to the Republic of the Philippines (the Recipient). The Grant is made in response to the Recipient's request for financial assistance and for the purposes and on the terms and conditions set forth in the Annex to this Letter Agreement. The Recipient represents, by confirming its agreement below, that it is authorized to contract and withdraw the Grant for the said purposes and on the said terms and conditions. Please confirm your agreement with the foregoing, on behalf of the Recipient, by signing, dating, and returning to us the enclosed copy of this Letter Agreement. Upon receipt by the Bank of the copy of this Letter Agreement countersigned by you, this Letter Agreement will become effective as of the date of the countersignature. Very truly yours, INTERNATIONAL BANK FOR RE NSTRUCTION AND DEVELOPMENT By /s/ Vinay K. Bhargava Acting Country Director, Philippines East Asia and Pacific Region AGREED: REPUBLIC OF THE PHILIPPINES By /s/ Edgardo B. Espiritu Secretary of Finance Date: September 7, 1999 ANNEX Purposes, Terms, and Conditions of the Grant 1. Purposes and Activities. 1.1. The purpose of the Grant is to assist the Recipient in designing reforms in selected areas of the pension and health insurance systems. The activities (the Activities) for which the Grant is given are as follows: (a) Provision of advisory services on the design of the mandatory defined contributions' pillar of the pension reform; and (ii) the design of the voluntary contributions' pillar of said reform; (b) Assessment of the Philippine Health Insurance Corporation and the MEDICARE Page 2 program, and formulation of ways to improve health insurance institutions and programs; and (c) Provision of training, through workshops and study tours, to staff of relevant contractual savings institutions and members of the Presidential Retirement Income Commission and the Department of Finance Contractual Savings Task Force on asset management and pension systems and the reform of such systems. 2. Implementation Generally 2.1. The Recipient shall: (a) carry out the Activities with due diligence and efficiency; (b) promptly provide the funds, facilities, services and other resources required for that purpose; (c) furnish all information covering the Activities and the use of the proceeds of the Grant as the Bank shall reasonably request; (d) from time to time exchange views with the Bank's representatives on the progress and results of the Activities; and (e) take all necessary measures required to enable the Bank to visit the territory of the Recipient for purposes related to the Grant. Without limitation on the foregoing, the Recipient shall, if the Bank shall so request, prepare and furnish to the Bank promptly upon completion of the Activities 'a report, in form and substance satisfactory to the Bank, on the results and impact of the Activities 3. Procurement 3.1. Except as the Bank shall otherwise agree, procurement of the consultants' services required for the carrying out of the Activities and to be financed out of the proceeds of the Grant shall be governed by the provisions of Attachment I to this Annex. 4. Withdrawal of Grant Proceeds 4.1. The amount of the Grant shall be credited to an account opened by the Bank on its books in the name of the Recipient (the Grant Account), and may be withdrawn therefrom by the Recipient in accordance with the provisions of this Section 4, for expenditures in respect of the reasonable cost of services required for the Activities and to be financed out of the proceeds of the Grant 4.2. The expenditures for the following items may be financed out of the proceeds of the Grant and shall be used exclusively in the carrying out of the Activities: Amount of the Grants % of Allocated in Expenditures Category United Dollars) to be Financed (1) Consultants