DOJ Opinion No. 074, s. 1981

DOJ OPINION NO. 074 , s. 1981 May 7, 1981 Export-Import Bank of the United States 811 Vermont Avenue, N. W. Washington, D. C. 20571, U. S. A. Private Export Funding Corporation 280 Park Avenue New York, New York 10017, U. S. A. Re: Eximbank Credit No. 6943, Philippines Gentlemen : As the Minister of Justice of the Republic of the Philippines (the "Guarantor"), I have been requested to render an opinion with respect to the applicable laws of the Republic of the Philippines in connection with the credit facility (the "Credit Facility") as such term is defined in the Agreement among the Development Bank of the Philippines (the "Borrower"), the Guarantor, and your good selves as Lenders dated as of February 5, 1981 (the Agreement" providing for a loan to the Borrower in the aggregate amount of up to Eighty Five Million United States Dollars (US$85,000,000) evidenced by promissory notes substantially in the form provided for by the Agreement (the "Notes"). All terms used herein shall have the meanings set forth in the Agreement except as otherwise defined herein. In connection herewith, I have examined the Constitution, relevant Civil Code provisions, Presidential decrees laws and regulations of the Republic of the Philippines (the "Republic"), the originals or copies, photocopied, certified or otherwise identified to my satisfaction, of all such corporate and official records of the Borrower and of all such official records, regulations, certificates, ruling and orders of officials and agencies of the Government of the Republic, certificates of officials and other representatives of the Borrower, and of all such other agreements, documents, and matters as I have considered necessary or desirable for the opinions hereinafter expressed including, without limitation, the following documents: (a) an executed copy of the Agreement, including the Exhibits attached thereto; (b) the charter of the Borrower (Republic Act No. 85, as amended); (c) Full Powers issued by the President of the Philippines, dated January 30, 1981, in favor of Minister of Finance Cesar Virata; (d) Letter of the Central Bank of the Philippines dated March 9, 1981, granting "Final approval and registration" to the Credit Facility; (e) Certificate of the Treasurer of the Borrower dated March 10, 1981, that the amount of the Credit Facility "does not exceed the equivalent of ten (10) times paid-in capital and surplus of the Borrower; and (f) Exchange Assurance Certificate of the Central Bank of the Republic, dated March 9, 1981. True and correct copies of the documents (c), (d), (e) and (f) mentioned above are attached to this opinion. In such examination, I have assumed the genuineness of all signatures and the authenticity of all documents submitted to me as copies thereof, and I have found nothing to indicate that such assumptions are not fully justified. As to any other matter of fact material to the opinions expressed herein, I have relied upon certificates of officers and other representatives of the Borrower. As I am qualified to render this opinion regarding the laws of the Republic and do not represent myself to be familiar with the laws of the United States of America or any state thereof, or the laws of any jurisdiction other than the Republic, I do not pass upon, and express no opinion in respect of, those matters governed by or construed in accordance with any such laws. Based upon and subject to the foregoing, I am of the opinion that: (1) The Guarantor has full power, authority, and legal right to incur the obligations provided for in the Agreement to execute and deliver the Agreement, to endorse its guarantee on the Notes, and to perform and observe the terms and provision of the Agreement and the guarantee endorsed on the Notes; (2) The guarantee in the Agreement does, and each guarantee on the Notes when endorsed thereon by the Guarantor will constitute valid, binding and enforceable obligations of the Guarantor in accordance with their respective terms, pledging the full faith and credit of the Republic; and no guarantees by, or obligations of, or loans, financing and credits made available to the Guarantor in currencies other than Philippine pesos shall have any priority or preference of any nature whatsoever, over the obligations hereunder of the Notes as to security or the payment of principal and interest except (i) liens on the Guarantor's property Created at the time of purchase of such property to secure its purchase price or (ii) liens arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date of its creation. (3) The Guarantor has taken all action necessary to authorize the execution, delivery and performance of this Agreement and the endorsement of the guarantee on the Notes and there is no constitutional provision, treaty, statute, law, regulation, decree or similar authority and no charter or by-law provision of the Guarantor and no provision of any existing contract or agreement relating to External Indebtedness binding on the Guarantor which would be contravened by the execution and delivery of the Agreement by the Guarantor or by the performance or observance of any of the terms hereof or the guarantee endorsed on the Notes; prcd (4) All registrations and approvals (including but not limited to foreign exchange approvals) of any governmental agency, department, or commission necessary for the execution, delivery and performance of the Agreement by it or the endorsement by it of the guarantee on the Notes, or for the validity and enforceability hereof and thereof, have been obtained and are in full force and effect; (5) The Guarantor is subject to civil and commercial law with respect to its obligations under the Agreement and the guarantee endorsed on the Notes, and the guarantee by it hereunder and on the Notes constitute private and commercial acts rather than governmental and public acts. Neither it nor any of its property enjoys any right of immunity on the grounds of sovereignty or otherwise from set off, attachment, suit, judgment or execution on a judgment in respect of its obligations under the Agreement and the waiver contained in Article VIII-D of any such right of such immunity is irrevocably binding; (6) There is no present tax or other charge levied or imposed by the Government of the Republic of the Philippines, or any political subdivision or taxing authority thereof, on the indebtedness of the Borrower incurred under the Agreement or on any Notes evidencing such indebtedness or on the Lenders respect to payment of the indebtedness of the Borrower incurred hereunder; (7) The exchange assurances required by paragraph (5) of Article VII of the Agreement are valid and binding; (8) The Guarantor is neither in breach of nor in default under any agreement, obligation or duty relating to External Indebtedness to which it is a party or by which it, or any of its assets is bound, and the execution and performance of the Agreement will not be or result in breach of any mortgage, deed, contract or agreement to which the Guarantor is a party or by which the Guarantor may be bound; (9) To the best of my knowledge, there are no pending or threatened legal actions or arbitration or other proceedings which may materially affect the financial condition of the Guarantor or the validity or enforceability of the Agreement or the Notes; and (10) The Guarantor is a member in good standing of the International Monetary Fund ("IMF") and eligible to use its general accounts and its special drawing account with the IMF in accordance with the Articles of Agreement of the IMF. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice