Conformed Copy - L4108 - Third Elementary Education Project - Amendment 1

Page 1 May 11, 2000 Honorable Jose T. Pardo Secretary Department of Finance Manila Republic of the Philippines Dear Sir, Re: Philippines Third Elementary Education Project: (Ln. 4108 PH; Amendment to Loan Agreement We refer to the Loan Agreement dated December 20, 1996 between the Republic of the Philippines (the Borrower) and the International Bank for Reconstruction and Development (the Bank), as amended on July 2, 1999, and December 13, 1999 respectively, and to the letter from Mr. Joel Bafares, Undersecretary, Department of Finance dated March 24, 2000, requesting the Bank to raise the percentage of Bank financing, and to cancel twenty million, one hundred thousand United States Dollars (US$20,100,000)from the Loan. We are pleased to inform you that the Bank, after due consideration, has approved your request, and Schedule 1 of the Loan Agreement is amended as indicated in the Attachment to this Amendment Letter. Except as specifically amended by this amendment letter, all provisions of the Loan Agreement remain in full force and effect. Please confirm your agreement to the above amendment by signing the form of confirmation set forth below, returning to us one fully executed original of this amendment letter, and retaining one original for your records. The effective date of this amendment letter is May 1, 2000, and it relates only to expenditures incurred after this date. Sincerely, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Vinay Bhava Country Director, Philippines East Asia and Pacific Region CONFIRMED: REPUBLIC OF THE PHILIPPINES By /s/ Jose T. Pardo Secretary of Finance cc: Hon. Andrew Gonzalez, FSC, Secretary, DECS Hon. Felipe Medalla, Director General and Secretary of Socio Economic Planning, NEDA Mr. Joel Banares, Undersecretary, Department of Finance Mr. Antonio A.S. Valdes, Undersecretary and TEEP Project Director, DECS Mr. Ramon C. Bacani, Asst. Secretary and TEEP Deputy Project Director, DECS Dr. Lidinila Luis\1eSantos, Director and TEEP Project Manager, DECS Hon. J. Pardo Page 2 May 11, 2000 bcc: Messrs./Mmes.: Balachander, Howarth, Ordu, Oblepias, Sta. Ines, Reyes, Belizario (EACPF); Ruby, Law (EASHD), Jensen (EAPCO), Hudes (LEGEA); Phung (LOAAS) EASHD Files SCHEDULE 1 Withdrawal of the Proceeds of the Credit "1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category, and the percentage of expenditures for items so to be financed in each Category: Category Amount of the of Loan Allocated Expenditures to (Expressed in USD) be financed 1 Civil Works 75% (a) under Part B.1 2,200,000 of the Project (b) under Part B.2 (c) of the Project 36,200,000 2 Goods (other than textbooks and instructional materials) (a) school and class 13,000,000 90% room kits (b) school furniture 2,200,000 90% (c) other goods 3,100,000 100% of foreign expenditures, 100% of local expenditures (ex-factory cost) and 90% of local for other items expenditures procured locally 3 Textbooks and 12,200,000 100% of foreign instructional expenditures, materials 100% of local expenditures (ex-factory cost) and 90% of local expenditures for other items procured locally 4 Training 10,400,000 100% of foreign expenditures and 65% of local expenditures 5 SIIF Grants under Part B.2(d) 2,100,000 90% of the Project Page 3 6 Consultants' services 1,800,000 100% 7 Unallocated 10,100,000 TOTAL 93,300,000 Amount Cancelled as of 20,100,000 March 28, 2000 Original Loan Amount 113,400,000"