Conformed Copy - L4446 - Local Government Finance and Development Project - Supplemental Letter 2

Page 1 REPUBLIC OF THE PHILIPPINES September 8, 1999 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 Re: Loan No. 4446 PH (Local Government Finance and Development Project) Performance Indicators Dear Sirs and Madams: I refer to the Loan Agreement of even date herewith between Republic of the Philippines (the Borrower) and International Bank for Reconstruction and Development (the Bank) for the above-captioned Project. For purposes of Paragraph 10 of Schedule 6 to the Loan Agreement, the Borrower shall monitor and evaluate the carrying out of the Project in accordance with the indicators set forth in the Annex to this Letter. Please confirm your agreement to the foregoing by signing on the form of confirmation below. Sincerely yours, By /s/ Edgardo B. Espiritu Authorized Representative AGREED: INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Bernard Funck Authorized Representative