Conformed Copy - L4301 - Early Childhood Development Project - Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 4301 PH Loan Agreement (Early Childhood Development Project) between REPUBLIC OF THE PHILIPPINES and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated April 8, 1998 LOAN NUMBER 4301 PH LOAN AGREEMENT AGREEMENT, dated April 8, 1998, between REPUBLIC OF THE PHILIPPINES (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Bank to assist in the financing of the Project; and (B) the Borrower intends to contract from the Asian Development Bank (ADB) two loans (collectively, the ADB Loans) in an amount of fifteen million seven hundred thousand dollars ($15,700,000) and in an amount equivalent to six million four hundred eighty-seven thousand Special Drawing Rights (SDR 6,487,000), respectively, to assist in the financing of the Project, on the terms and conditions set forth in two agreements (respectively, the Ordinary Operations Loan Agreement and the Special Operations Loan Agreement, and collectively, the ADB Loan agreement),Agreements) to be entered into between the Borrower and ADB; WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Page 2 Agreements for Single Currency Loans" of the Bank, dated May 30, 1995 (as amended through December 2, 1997) (the General Conditions), constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings wherever used in this Agreement: (a) "Bangko Sentral ng Pilipinas" means the Central Bank of the Republic of the Philippines, an agency of the Borrower, and any successor thereto; (b) "Category" means a category of items set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (c) "CWC" means the Council for the Welfare of Children, an agency of the Borrower attached to DSWD, responsible for overseeing all programs, policies and issues concerning children, and any successor thereto; (d) "DECS" means the Department of Education, Culture and Sports, an agency of the Borrower, and any successor thereto; (e) "DOF" means the Department of Finance, an agency of the Borrower and any successor thereto; (f) "DOH" means the Department of Health, an agency of the Borrower, and any successor thereto; (g) "DSWD" means the Department of Social Welfare and Development, an agency of the Borrower, and any successor thereto; (h) "IEC" means information, education and communication; (i) "LGU" means a local government unit, a political subdivision of the Borrower, at the municipal or city or provincial level; (j) "LGU Sub-project" means a specific investment sub-project approved for financing under Part A.2 of the Project in accordance with the criteria and procedures set forth in the LGU Support Facility Operations; (k) "LGU Financing Facility" means the facility to be established by the Borrower under Part A.2 of the Project, pursuant to the provisions of Section 3.01 (c) ofparagraph B.1 of Schedule 5 to this Agreement; (l) "LGU Financing Facility Manual of Operations" means the manual LGU Financing Facility Manual of Operations, referred to in paragraph B.12 of Schedule 5 to this Agreement, as the same may be amended from time to time with the prior concurrence of the Bank; (m) "MDF" means the Municipal Development Fund established under Presidential Decree No. 1914 dated March 29, 1984, administered by DOF through the Bureau of Local Government Finance to make financial resources available to LGUs for duly approved specific projects or activities, and any successor thereto; (n) "PMO" means project management office, at the national, regional or provincial level, as the case may be, referred to in paragraphs A.4, A.5 and A.6 of Schedule 5 to this Agreement, responsible for the supervision and monitoring of project implementation at the respective level; (o) "Project Regions" means Regions VI, VII and XII in the Philippines, and "Project Region" means one of the Project Regions; (p) "Project Province" means a province within any of the Project Regions, Page 3 and "Project Provinces" means more than one such province; (q) "Project Steering Committee" means the inter-agency committee referred to in paragraph A.1 of Schedule 5 to this Agreement; (r) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; and (s) "Sub-project" means a specific investment project approved for financing under Part A.2 of the Project in accordance with the criteria and procedures set forth in the LGU Financing Facility Manual of Operations; (t) "Sub-project Assistance Agreement" means the agreement referred to in paragraph B.3.4 of Schedule 5 to this Agreement between the Borrower through the national PMO and an LGU, for the implementation of the LGU Sub-project, and "MOA" means any of a Sub-project; and "Sub-project Assistance Agreements" means more than one such agreement; and (u) "Ten-year National Early Childhood Development Program" means the program of national investments to promote early childhood development, adopted by the Borrower in May 1996, and referred to in Section 3.044.02 of this Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, an amount equal to nineteen million dollars ($19,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. (b) The Borrower may, for the purposes of the Project, open and maintain in dollars a special deposit account in a commercial bank specifically authorized for this purpose by the Bangko Sentral ng Pilipinas, on terms and conditions satisfactory to the Bank, including appropriate protection against set-off, seizure and attachment. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 6 to this Agreement. Section 2.03. The Closing Date shall be December 31, 2004 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.05. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Interest Period equal to LIBOR Base Rate plus LIBOR Total Spread. (b) For the purposes of this Section: (i) "Interest Period" means the initial period from and including the date of this Agreement to, but excluding, the first Interest Payment Date occurring thereafter, and after the initial period, each period from and including an Interest Payment Date to, but excluding the next following Interest Payment Date. (ii) "Interest Payment Date" means any date specified in Section 2.06 Page 4 of this Agreement. (iii) "LIBOR Base Rate" means, for each Interest Period, the London interbank offered rate for six-month deposits in dollars for value the first day of such Interest Period (or, in the case of the initial Interest Period, for value the Interest Payment Date occurring on or next preceding the first day of such Interest Period), as reasonably determined by the Bank and expressed as a percentage per annum. (iv) "LIBOR Total Spread" means, for each Interest Period: (A) one half of one percent (1/2 of 1%); (B) minus (or plus) the weighted average margin, for such Interest Period, below (or above) the London interbank offered rates, or other reference rates, for six-month deposits, in respect of the Bank