Conformed Copy - L4227 - Water Districts Development Project - Amendment 2

Page 1 June 8, 1999 Hon. Edgardo Espiritu Secretary Department of Finance Department of Finance Building Roxas Blvd., Manila Republic of the Philippines Mr. Jesus Diaz Executive Vice President Land Bank of the Philippines #319 Sen. Gil Puyat Avenue Makati City Republic of the Philippines Dear Secretary Espiritu and Mr. Diaz: RE.: Water Districts Development Project (LN 4228PH) Amendment to Loan and Guarantee Agreements I refer to the Loan Agreement dated May 15, 1999 between the Land Bank of the Philippines (the "LBP") and the International Bank for Reconstruction and Development (the "Bank") for the above referenced Project (the "Loan Agreement") and to the Guarantee Agreement dated May 15, 1999 between the Republic of the Philippines (the "Guarantor") and the Bank for the same Project. I am pleased to inform you that the Bank agrees to amend the Loan and Guarantee Agreements as follows: 1. Paragraph (C) in the Preamble to the Guarantee Agreement is amended to read as follows: "(C) by the LBP Loan Agreement the Bank has agreed to extend to the Borrower a loan in the amount of thirty\1esix million three hundred thousand dollars (S36.300,000) (the LBP Loan), on the terms and conditions set forth in the said LBP Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of the Borrower in respect of such loan as provided in this Agreement; and" 2. Part A of Section I to Schedule 4 is amended to read as follows: "Goods and works for Part B of the Project shall be procured in accordance with the provisions of Section I of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in January 1995 and revised in January and August 1996, and September 1997 (the Guidelines) and the following provisions of this Section, as applicable." 3. Part A of Section II to Schedule 4 is amended to read as follows: "Consultants' services for Part B of the Project shall be procured in accordance with the provisions of the Introduction and Section IV of the "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" published by the Bank in January 1997 and revised in September 1997 (the Consultant Guidelines) and the following provisions of Section II of this Schedule." 4. Paragraph 4 of Schedule 6 shall be amended to read as follows: "4. Each Subsidiary Loan Agreement shall further provide that no disbursement shall occur until: (i) the Loan shall have been declared effective and (ii) the Bank shall have been provided with an opinion or opinions satisfactory to the Bank of counsel acceptable to the Bank showing that such Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and the respective Participating LGU and is legally binding and enforceable upon the Borrower and such Participating LGU in accordance with its terms. In addition, no disbursements under the Subsidiary Loan Agreements under Categories (1) and (2) shall occur until the Participating LGU shall have taken the actions specified under Page 2 subparagraphs (a), (b), (c), (d) and (e) of paragraph 3 above." Except as specifically amended by this amendment letter, all provisions of the Loan and Guarantee Agreements otherwise remain in full force and effect. Please confirm your agreement to the amendments set out above by having authorized representatives of the Borrower and Guarantor sign the form of confirmation ` set forth hereinbelow, and returning the original signed copy to the Bank. We will provide the Department of Finance and the Land Bank of the Philippines a fully executed original of this amendment letter when the process has been completed. This amendment letter shall become effective as of the date first above "Titter, once it has been fully executed by all parties thereto. Sincerely, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Vinay Bhargava Country Director, Philippines East Asia and Pacific Region CONFIRMED: REPUBLIC OF THE PHILIPPINES By /s/ JOEL A. BANARES Authorized Representative Undersecretary of Finance Date: 11 June 1999 LAND BANK OF THE PHILIPPINES By /s/ JESUS F. DIAZ Authorize Representative Date: July 13, 2000