DOJ Opinion No. 110, s. 1990

DOJ OPINION NO. 110 , s. 1990 June 14, 1990 The Executive Director Office of ASEAN Affairs Department of Foreign Affairs PICC, Manila M a d a m : With reference to the proposed Memorandum of Understanding ("MOU") on the Regional Training Programme under the ASEAN-Canadian Dialogue, you request this Department's "comments and appropriate action" on the suggested Annex "D" of the MOU the provisions of which shall be based upon those of Annex "C" of the MOU. prLL It appears that the MOU concerns a Canadian development assistance project in the ASEAN region; that the MOU shall be executed between the Canadian Government and the ASEAN, on behalf of the six-member states; that insofar as the Philippines is concerned, the MOU is intended to be a subsidiary agreement to the Philippine-Canadian General Agreement on Development Cooperation dated November 13, 1987; that the Philippines objected to this arrangement because the aforesaid general agreement has not yet been ratified by the Philippine Senate; that the Philippines has suggested instead that an Annex "D" be appended to the MOU the provisions of which shall be patterned after those contained in Annex "C" of the MOU; and that pursuant to such suggestion, Annex "D" will specify the Philippine Government's obligations relative to the execution of the project which shall be similar to those of the Governments of Brunei, Indonesia and Singapore as stipulated in Annex "C" of the MOU. Upon perusal of the various obligations mentioned in Annex "C" of the MOU, we find that, by and large, these obligations may lawfully be undertaken by the Philippine Government. However, we would like to suggest the following : 1. Exclude paragraph 3 of Annex "C" granting tax exemption to the income of Canadian firm and personnel. Under the Tax Code, the income of resident aliens in the Philippines are taxable (De Leon, National Internal Revenue Code Annotated, 1989 Ed., p.44). 2. The inclusion of Paragraphs 7 (on repatriation of salaries) and 10 (on security clearances) of Annex "C" should have the prior clearances of the Central Bank and the Department of National Defense as the government agencies competent to pass upon the legality of the undertakings prescribed therein. Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary