DOJ Opinion No. 027, s. 1980

DOJ OPINION NO. 027 , s. 1980 February 14, 1980 To: The Lenders and the Agent as defined in the below- mentioned Loan Agreement Gentlemen: In my capacity as legal adviser to the Republic of the Philippines ("Guarantor"), I have reviewed the US$30 million Loan Agreement dated as of January 5, 1980 (the "Loan Agreement") among Philippine Airlines, Inc., the Guarantor, certain financial institutions named in the Loan Agreement, as Lenders, Chase Manhattan Asia Limited and The Daiwa Bank Limited, as Managers, and Chase Manhattan Asia Limited, as Agent. In connection therewith, I have examined the pertinent provisions of the Constitution and the laws of the Republic of the Philippines and the original, certified, conformed or photographic copies of such documents, records, agreements and certificates which are relevant hereto, including the following documents: (i) An executed copy of the Loan Agreement. (ii) Executed copies of the Letter Agreements. (iii) Full powers issued by the President of the Philippines on December 26, 1979 in favor of Minister of Finance Cesar Virata. Except as expressly specified herein all terms used herein and defined in the Loan Agreement shall have the respective meanings ascribed to them in the Loan Agreement. LLjur Based upon the foregoing, I am of the opinion that: 1. The guarantor has full power, authority and legal right to make and perform the Loan Agreement; and the Loan Agreement constitutes a legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms. 2. The making and performance by the Guarantor of the Loan Agreement have been duly authorized by all necessary action of the Guarantor and do not and will not violate the provisions of any applicable law, regulation or government guideline or any order to any court, regulatory body or arbitral tribunal, and do not and will not result in the breach of, or constitute a default under, or require any waiver or consent under, any agreement, treaty convention, instrument or document relating to Foreign Debt to which the Guarantor is a party or by which the Guarantor or any of its property may be bound or affected. 3. All consents, approval, licenses and authorizations of, and filings and registrations with, any governmental authority required under applicable law and regulations for the making and performance by the Guarantor of the Loan Agreement have been obtained or effected and are in full force and effect. 4. The Guarantor's obligations under the Loan Agreement are and will at all times be direct and unconditional general obligations of the Guarantor, and rank and will at all time rank in right of payment at least pari passu with all other unsecured obligations of the Guarantor, whether now or hereafter outstanding. The full faith and credit of the Republic of the Philippines is pledged for the payment and performance by the Guarantor of its obligations under the Loan Agreement. 5. The Guarantor is subject to civil and commercial law with respect to its obligations under the Loan Agreement; the making and performance by the Guarantor of the Loan Agreement constitute private and commercial acts rather than governmental or public acts; and neither the Guarantor nor any of its property has any right of immunity from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of judgment, set-off, execution of judgment or from any other legal process with respect to its obligations under the Loan Agreement. The Guarantor is not a party to any agreement with the United States of America which relates in any way to the immunity of the Guarantor or any agency or instrumentality of the Guarantor from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of judgment, set-off, execution of judgment or from any other legal process. 6. The Loan Agreement is in proper legal form under the laws of the Republic of the Philippines for the enforcement thereof against the Guarantor under such laws and, if governed by such laws, would constitute legal, valid and binding obligations of the Guarantor, enforceable in accordance with its terms. 7. No notarization is required, no formalities in the Republic of the Philippines remain to be accomplished, and no Philippine Taxes are required to be paid, for the validity or enforceability of the Loan Agreement. 8. The choice of New York law to govern the Loan Agreement and the Notes is, under the law of the Republic of the Philippines, a valid choice of law and will be honored by the courts of the Republic of the Philippines. 9. Under the laws of the Republic of the Philippines, the Guarantor has validly submitted to the jurisdiction of the courts in and of the States of New York and in the event that a judgment of such courts were obtained after service of process in the manner specified in the Loan Agreement, the same would be enforceable by suit on the judgment, subject only to defenses based on want of jurisdiction, want of notice, collusion, fraud or clear mistake of law or fact. Under the laws of the Republic of the Philippines, the courts of the Republic of the Philippines have jurisdiction to adjudicate any action relating to the Guarantor's obligations under the Loan Agreement brought against the Guarantor in such courts by any Lender, any Manager or the Agent. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice