LOAN NUMBER 9312-PH
Loan Agreement
(Promoting Competitiveness and Enhancing Resilience to Natural Disasters Sub-Program 3
Development Policy Loan)
between
REPUBLIC OF THE PHILIPPINES
and
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
LOAN AGREEMENT
AGREEMENT dated as of the Signature Date between REPUBLIC OF THE PHILIPPINES
("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND
DEVELOPMENT ("Bank") for the purpose of providing financing in support of the Program (as
defined in the Appendix to this Agreement). The Bank has decided to provide this financing on
the basis, inler alia, of: (i) the actions which the Borrower has already taken under the Program and
which are described in Section I of Schedule I to this Agreement; and (ii) the Borrower's
maintenance of an adequate macroeconomic policy framework. The Borrower and the Bank
therefore hereby agree as follows:
ARTICLE I -GENERAL CONDITIONS; DEFINITIONS
1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form
part of this Agreement.
1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have
the meanings ascribed to them in the General Conditions or in the Appendix to this
Agreement.
ARTICLE II- LOAN
2.01. The Bank agrees to lend to the Borrower the amount of six hundred million Dollars
($600,000,000), as such amount may be converted from time to time through a Currency
Conversion ("Loan").
2.02. The Front-end Fee is one quarter of one percent (0.25%) of the Loan amount.
2.03 The Commitment Charge is one quarter of one percent (0.25%) per annum on the
Unwithdrawn Loan Balance.
2.04. The interest rate is the Reference Rate plus the Variable Spread or such rate as may apply
following a Conversion; subject to Section 3.02(e) of the General Conditions.
2.05. The Payment Dates are June I and December I in each year.
2.06. The principal amount of the Loan shall be repaid in accordance with Schedule 2 to this
Agreement.
2.08. Without limitation upon the provisions of Section 5.05 of the General Conditions, the
Borrower shall promptly furnish to the Bank such information relating to the provisions of
this Article 11 as the Bank may, from time to time, reasonably request.
ARTICLE III - PROGRAM
3.01. The Borrower declares its commitment to the Program and its implementation. To this end,
and further to Section 5.05 of the General Conditions:
(a) the Borrower and the Bank shall from time to time, at the request of either party,
exchange views on the Borrower's macroeconomic policy framework and the
progress achieved in carrying out the Program;
(b) prior to each such exchange of views, the Borrower shall furnish to the Bank for
its review and comment a report on the progress achieved in carrying out the
Program, in such detail as the Bank shall reasonably request; and
(c) without limitation upon paragraph (a) and (b) of this Section, the Borrower shall
promptly inform the Bank of any situation that would have the effect of materially
reversing the objectives of the Program or any action taken under the Program
including any action specified in Section I of Schedule I to this Agreement.
ARTICLE IV - REMEDIES OF THE BANK
4.01. The Additional Event of Suspension consists of, namely a situation has arisen which shall
make it improbable that the Program, or a significant part of it, will be carried out.
ARTICLE V-EFFECTIVENESS; TERMINATION
5.01. The Additional Condition of Effectiveness consists of, namely, the Bank is satisfied with
the progress achieved by the Borrower in carrying out the Program and with the adequacy
of the Borrower's macroeconomic policy framework.
5.02. The Effectiveness Deadline is the date ninety (90) days after the Signature Date.
ARTICLE VI- REPRESENTATIVE; ADDRESSES
6.01. The Borrower's Representative is its Secretary of Finance.
6.02. For purposes of Section 10.01 of the General Conditions:
(a) the Borrower's address is:
Department of Finance
Department of Finance Building
Roxas Blvd. cor. Pablo Ocampo Sr. St.
Manila 1004
Philippines; and
(b) the Borrower's Electronic Address is:
Facsimile: E-mail:
T< 6 3-2) 8523-9216 secfinddof.gov.ph
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6.03. For purposes of Section 10.01 of the General Conditions: (a) the Bank's address is:
International Bank for Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America; and
(b) the Bank's Electronic Address is:
Telex: Facsimile: E-mail:
248423(MCI) or 1-202477-6391 PhiliPpinesCMU worldbank.ori
64145(MCI)
AGREED as of the Signature Date.
REPUBLIC OF THE PHILIPPINES
By
Authorized Representative
Name: CARLOS G. DOMINGUEZ
Title: Secretary of Finance
Date: DEC 15 2021
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
By N14it, Rior
Authorized Representative
Ndiame Diop
Name:
Title: Country Di rector
15-Dec-2021
Date:
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SCHEDULE I
Program Actions; Availability of Loan Proceeds
Section I. Actions Taken under the Program
The actions taken by the Borrower under the Program include the following:
1. Promoting Competitiveness
I. The Borrower has introduced non-discriminatory access to poles and broadband
infrastructure and the simplified fixed broadband network rollout process, as
evidenced through the Joint Memorandum Circular Number 01 -Series of 2021.
2. The Borrower has streamlined and automated the national and local government
processes for starting a business, as evidenced through the CBP Joint
Memorandum Circular Number 01 - Series of 2021.
3. The Borrower has strengthened the regulatory framework for implementing the
risk-based controls and enhanced cargo selectivity, as evidenced through Customs
Administrative Order Number 02-2021 and Customs Memorandum Order
Numbers 21-2020, 09-2021 and 26-2021.
4. The Borrower has reduced the capital requirement for foreign ownership, and
relaxed qualification and local inventory requirements for foreign retailers, as
evidenced through: (i) the approval by the Bicameral Conference Committee of
Senate Bill Number 1840 and House Bill Number 59 amending the Retail Trade
Liberalization Act of 2000; and (ii) the commencement of the process of
transmitting the said Bill(s) by the Congress to the President.
II. Enhancing Resilience
1. The Borrower has rationalized tax incentives and improved process for monitoring
and evaluation of the granted tax incentives, as evidenced through the Republic
Act Number I 1534.
2. The Borrower has: (i) adopted PhilSys as the primary means for identification and
verification of social assistance beneficiaries; and (ii) established guidelines for
the implementation thereof, as evidenced through the Memorandum of Agreement
between the DSWD and the PSA on September 20, 2021.
3. The Borrower has strengthened payment system governance framework and risk
management, as evidenced through BSP Circular Numbers 1126 and 1127 - Series
of 202 1.
4. The Borrower has adopted claims management procedures for the national
indemnity insurance program to link pre-arranged financing to pre-arranged
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funding channels for rapid response as evidenced through the Memorandum
between DOF and DBM executed on September 13, 2021.
5. The Borrower has launched a pilot for the web-based national asset registry system
as evidenced through the Memorandum issued by the BTR on December 2, 2020.
Section II. Availability of Loan Proceeds
A. General. The Borrower may withdraw the proceeds of the Loan in accordance with the
provisions of this Section and such additional instructions as the Bank may specify by
notice to the Borrower.
B. Allocation of Loan Amounts. The Loan is allocated in: (a) a single withdrawal tranche
from which the Borrower may make withdrawals of the Loan proceeds; and (b) the
amounts requested by the Borrower to pay the Front-end Fee. The allocation of the amounts
of the Loan to this end is set out in the table below:
Allocations Amount of the Loan Tranche
Allocated
(expressed in USD)
(1) Single Withdrawal Tranche 598,500,000
(2) Front-end Fee 1,500,000
TOTAL AMOUNT 600,000,000
C. Withdrawal Tranche Release Conditions.
No withdrawal shall be made of the Single Withdrawal Tranche unless the Bank is
satisfied: (a) with the Program being carried out by the Borrower; and (b) with the adequacy
of the Borrower's macroeconomic policy framework.
D. Deposit of Loan Amounts.
The Borrower, within thirty (30) days after the withdrawal of the Loan from the Loan
Account, shall report to the Bank: (a) the exact sum received into the account referred to
in Section 2.03(a) of the General Conditions; (b) the details of the account to which the
Philippine Peso equivalent of the Loan proceeds will be credited; (c) the record that an
equivalent amount has been accounted for in the Borrower's budget management systems;
and (d) the statement of receipts and disbursement of the account referred to in Section
2.03(a) of the General Conditions.
E. Closing Date. The Closing Date is March 31, 2023.
SCHEDULE 2
Commitment-Linked Amortization Repayment Schedule
The following table sets forth the Principal Payment Dates of the Loan and the percentage of the
total principal amount of the Loan payable on each Principal Payment Date ("Installment Share").
Level Principal Repayments
Principal Payment Date Installment Share
On each June I and December 1
Beginning June 1, 2027
through December 1, 2039 3.7%
On June 1, 2040 3.8%
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APPENDIX
Definitions
I. "ARTA" means the Borrower's Anti-Red Tape Authority, or any successor thereto.
2. "Bicameral Conference Committee" means a committee composing of designated
members from the Borrower's Senate and House of Representatives and tasked with
settling and reconciling differences or disagreements on any provisions of a bill that has
been approved by the Senate and the House of Representatives prior to transmission to the
President.
3. "BIR" means the Borrower's Bureau of Internal Revenue, or any successor thereto.
4. "BOC" means the Borrower's Bureau of Customs, or any successor thereto.
5. "BSP" means the Borrower's central bank, Bangko Sentral ng Pilipinas, or any successor
thereto.
6. "BSP Circular Numbers 1126 and 1127- Series of 2021" means, collectively, Circular No.
126 issued by BSP on September 14, 2021 adopting the principles for financial market
infrastructure; and Circular No. I127 issued by BSP on September 17, 2021 on governance
policy for operators of payment system.
7. "BTR" means the Borrower's Bureau of the Treasury, or any successor thereto.
8. "CAAP" means the Borrower's Civil Aviation Authority of the Philippines, or any
successor thereto.
9. "CBP Joint Memorandum Circular Number 01 - Series of 2021" means a circular dated
January 28, 2021 jointly issued by ARTA, DICT, DILG, DOF, DTI, BIR, SSS, SEC, FDA,
CDA, Home Development Mutual Fund, and Philippine Health Insurance Corporation
providing guidelines on the use and governance of the central business portal.
10. "CDA" means the Borrower's Cooperative Development Authority, or any successor
thereto.
I1. "Customs Administrative Order Number 02-202 1" means Customs Administrative Order
Number 02-2021 issued by BOC on May 4, 2021 and approved by DOF on May 18, 2021
on clearance of goods under the informal entry process.
12. "Customs Memorandum Order Numbers 21-2020, 09-2021 and 26-2021" means
collectively, (i) Custom Memorandum Order Number 21-2020 issued by BOC on August
26, 2020 on enhanced cargo selectivity system; (ii) Custom Memorandum Order Number
09-2021 issued by BOC on March 4, 2021 on customs clearance procedures on express
shipments; and (iii) Custom Memorandum Order Number 26-2021 issued by BOC on
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August 10, 2021 on implementation of the authorized economic operator online portal
system.
13. "DA" means the Borrower's Department of Agriculture, or any successor thereto.
14. "DBM" means the Borrower's Department of Budget and Management, or any successor
thereto.
15. "DHSUD" means the Borrower's Department of Human Settlement and Urban
Development, or any successor thereto.
16. "DICT" means the Borrower's Department of Information and Communications
Technology, or any successor thereto.
17. "DILG" means the Borrower's Department of the Interior and Local Government, or any
successor thereto.
18. "DOF" means the Borrower's Department of Finance, or any successor thereto.
19. "DPWH" means the Borrower's Department of Public Works and Highways, or any
successor thereto.
20. "DSWD" means the Borrower's Department of Social Welfare and Development, or any
successor thereto.
21. "DTI" means the Borrower's Department of Trade and Industry, or any successor thereto.
22. "ERC" means the Borrower's Energy Regulatory Commission, or any successor thereto.
23. "FDA" means the Borrower's Food and Drug Administration, or any successor thereto.
24. "General Conditions" means the "International Bank for Reconstruction and Development
General Conditions for IBRD Financing, Development Policy Financing", dated December
14, 2018 (revised on August 1, 2020, December 21, 2020, and April I, 2021).
25. "Joint Memorandum Circular Number 01 - Series of 2021" means a circular jointly issued
by ARTA, DICT, DILG, DHSUD, DPWH, CAAP, NTC, NEA, ERC, and PCC on October
25, 2021 providing streamlined guidelines for the issuance of permits and clearances for
the erection of poles, construction of underground fiber ducts and installation of aerial and
underground cables and facilities to accelerate the roll out of telecommunications and
internet infrastructure.
26. "NEA" means the Borrower's National Electrification Administration, or any successor
thereto.
27. "NTC" means the Borrower's National Telecommunications Commission, or any
successor thereto.
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28. "PCC" means the Borrower's Philippine Competition Commission, or any successor
thereto.
29. "Philippine Peso" means the lawful currency of the Borrower.
30. "PhilSys" means the Borrower's foundational identification system for all of its citizen and
resident aliens.
31. "Program" means: the program of objectives, policies, and actions set forth or referred to
in the letter dated October 28, 2021 from the Borrower to the Bank declaring the
Borrower's commitment to the execution of the Program, and requesting assistance from
the Bank in support of the Program during its execution and comprising actions taken,
including those set forth in Section I of Schedule I to this Agreement, and actions to be
taken consistent with the program's objectives.
32. "PSA" means the Borrower's Philippine Statistics Authority, or any successor thereto.
33. "Republic Act Number 11534" means the Corporate Recovery and Tax Incentives for
Enterprises Act signed into law by the Borrower's President on March 26, 2021.
34. "SSS" means the Borrower's Social Security System, or any successor thereto.
35. "SEC" means the Borrower's Securities and Exchange Commission, or any successor
thereto.
36. Signature Date" means the later of the two dates on which the Borrower and the Bank
signed this Agreement and such definition applies to all references to "the date of the Loan
Agreement" in the General Conditions.
37. "Single Withdrawal Tranche" means the amount of the Loan allocated to the category
entitled "Single Withdrawal Tranche" in the table set forth in Part B of Section II of
Schedule I to this Agreement.
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