DOJ Opinion No. 100, s. 1984

DOJ OPINION NO. 100 , s. 1984 July 10, 1984 Crocker National Bank One Montgomery Street San Francisco, California 94104 Pacific Overseas Finance Corporation Four Embarcadero Center San Francisco, California 94111 Gentlemen : I have acted as legal adviser to the Republic of the Philippines (the "Guarantor") in connection with that certain $40 Million Credit and Guaranty Agreement dated April 14, 1984 (the "Agreement"), among the Guarantor, Philippines International Trading Corporation (the "Buyer"), Pacific Overseas Finance Company ("POFC") and Crocker National Bank (the "Bank"). This opinion is furnished to you pursuant to Section 5.(a)(5) of the Agreement, and terms defined in the Agreement are used herein as therein defined. In connection therewith, and in any capacity as Minister of Justice, I have examined the Constitution, laws and regulations of the Republic of the Philippines (the "Republic"). I have also examined (i) an executed copy of Agreement, (ii) the Notes delivered pursuant to the Agreement, and (iii) such other documents as I have deemed necessary or appropriate as a basis for the opinions expressed herein. On the basis of the foregoing, I am of the opinion that: (1) The Guarantor has full power, authority and legal right to execute and deliver the Agreement, including the Guaranty, and to incur and perform its obligations as provided for under the Agreement and no other Governmental Approval is necessary in connection with the execution, delivery, performance and admissibility into evidence or enforceability of the Agreement, except for the Governmental Approvals specified in Section 5.1(a)(2)(C)(ii) of the Agreement. (2) The Agreement and the Guaranty have been duly executed and delivered by the Guarantor and constitute the direct unconditional and general obligations of the Guarantor binding on and enforceable against the Guarantor for the performance and payment of which the full faith and credit of the Republic is pledged. (3) There is no Philippine Tax either (i) on or by virtue of the execution, delivery, registration or enforcement of the Agreement, the Guarantor or any other document to be issued or furnished under the Agreement or (ii) on any payment to be made by the Guarantor pursuant to the Agreement or the Notes other than withholding taxes on the interest payable under the Notes and documentary stamp taxes that may be due on the issuance of the Notes. The obligations of the Guarantor under Section 6.2 of the Agreement to make all payments of principal, interest and other sums payable by the Guarantor under the Agreement and the Notes free and clear of, and without reduction by reason of, any Philippine Taxes, and its other obligations under said Section 6.2, are each valid and enforceable under the laws of the Republic. (4) The execution, delivery and performance of the Agreement, including the Guaranty, do not and will not contravene any constitutional provision, decree, ordinance, regulation or law or any contractual restrictions relating to External Indebtedness binding on or affecting the Guarantor. (5) It is not necessary for the enforceability or admissibility in evidence of the Agreement and the Notes in the Republic that the Agreement or the Notes or any other document be filed or recorded with any Governmental Agency (except for the filing of the Agreement with the Central Bank). The approval by the Central Bank of the terms of this Agreement referred to in Section 5.1(a)(2)(C)(ii) carries with it the authority to purchase the necessary foreign exchange from the local banking system to service the obligations of the Guarantor under the Agreement. No authorization or exchange control approval from any Governmental Agency in the Republic other than those referred to in Section 5.1(a)(2)(C)(ii) of the Agreement is required for it to make payments of all amounts due under the Agreement and the Notes in the currency and manner and at the times required by the Agreement and the Notes. LexLib (6) The Guarantor is a member in good standing of the IMF and is eligible to use the General Account of, and its Special Drawing Account with, the IMF under the Articles of Agreement of the IMF. (7) There is no pending or, to the best of my knowledge, threatened action or proceeding (legal or administrative) affecting the Guarantor before any court or arbitrator, which would, if decided adversely to the Guarantor, materially adversely affect the financial condition or operations of the Guarantor. (8) The Guarantor's obligations under the Agreement and the Notes rank at least pari passu in priority of payment and in all other respects with all other External Indebtedness of the Guarantor, except for External Indebtedness secured by Liens permitted by Section 9.3 of the Agreement, and to my best knowledge, no obligation of the Guarantor in respect of its External Indebtedness is secured by any Lien over the whole or any part of its undertaking, property, assets or revenues except for Liens permitted by Section 9.3 of the Agreement. (9) Legal actions or proceedings may be brought against the Guarantor in the courts of the Republic or of any other jurisdiction in which proceedings may at any time be taken by POFC or the Bank for the enforcement of the Agreement, the Notes or any other document issued in connection therewith. The waiver by the Guarantor of the right of sovereign immunity to the fullest extent as set forth in Section 21.10 of the Agreement is valid and enforceable upon it, and in accordance with applicable law and precedents. (10) The Agreement is in proper and legal form under the laws of the Republic and would be enforced in accordance with its terms if proceedings for the enforcement thereof were brought in the courts of the Republic. (11) The choices of California law as the law by which the Agreement shall governed is a valid choice of law irrevocably, binding on the Guarantor and will be upheld in any proceeding related to the Agreement in the Republic. A Philippine court would, however, also refer to Philippine laws, decrees, and administrative regulations bearing upon the capacity of the Guarantor to enter into contracts generally and the Guaranty in particular. The submission by the Guarantor to the jurisdiction of the courts of the State of the California and Federal Courts sitting in San Francisco and the New York and Federal Courts sitting in New York City pursuant to Section 21.4 of the Agreement is valid and binding upon the Guarantor and is not subject to revocation. A final judgment rendered by any such court in proceedings arising out of or in connection with the Agreement would be enforced by the courts of the Republic without a further review, except to the extent only that such judgment may be subject to defenses based on lack of jurisdiction, lack of notice, fraud, collusion, or clear mistake of law or fact. If process is served on the Guarantor in the manner contemplated by Section 12.4 of the Agreement, enforcement of a judgment by the courts of the Republic would not be subject to defenses based on lack of jurisdiction over the Guarantor or lack of notice. (12) The credit facility under Article II of the Agreement constitutes loans and guaranteed by a foreign government export credit agency and/or a trade-related financing having an original and unmatured tenor of 360 days or less and is, as such exempt from the postponement requested by the Philippine Government in respect of the repayment by Philippine obligors of any principal amount of external debt owed to foreign financial institutions falling due within the period commencing October 17, 1983 up to and until July 12, 1984. The expression herein of a specific opinion with regard to a matter covered by a more general opinion also expressed herein is not intended to limit the latter. No opinion is expressed as to any laws other than those of the Republic as at present existing and the regulations made pursuant thereto. LexLib Unless and until we give notice to POFC and the Bank prior to the extension of any credit the Agreement of any change in this opinion, each thereof may rely on the conclusion expressed herein at all times from the date hereof to and including the date of such extension of credit. Very truly yours, (SGD.) ESTELITO P. MENDOZA Minister of Justice