Conformed Copy - L4422 - LGU Urban Water and Sanitation Project - Supplemental Letter 3

Page 1 DEVELOPMENT BANK OF THE PHILIPPINES January 29, 1999 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 Re: Loan No. 4422 PH (LGU Urban Water and Sanitation Project) Performance Indicators Ladies and Gentlemen: I refer to the Loan Agreement of even date herewith between International Bank for Reconstruction and Development (the Bank) and the Development Bank of the Philippines (the Borrower) and the Guarantee Agreement between the Republic of Philippines (the Guarantor) and the International Bank for Reconstruction and Development (the Bank) for the above-noted Project. For purposes of Paragraph 4 (a) of Schedule 5 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, DEVELOPMENT BANK OF THE PHILIPPINES By /s/ Remedios Macalincag Authorized Representative AGREED: AGREED: INTERNATIONAL BANK FOR RECONSTRUCTION REPUBLIC OF THE PHILIPPINES AND DEVELOPMENT By /s/ Vinay Bhargava By /s/ Joel Banares Authorized Representative Authorized Representative