DOJ Opinion No. 116, s. 1981

DOJ OPINION NO. 116 , s. 1981 August 27, 1981 The Long-Term Credit Bank of Japan, Limited 2-4 Otemachi l-chome Chiyoda-ku, Tokyo J a p a n Loan Agreement dated as of July 18, 1981 Gentlemen : As the Minister of Justice of the Republic of the Philippines (the "Philippines"), I am rendering this opinion pursuant to subsection (d) of Section 9 of the Loan Agreement (the "Agreement"), dated as of July 18, 1981, between the Development Bank of the Philippines as borrower (the "Borrower") and the Long-Term Credit Bank of Japan, Limited as lender (the 'Lender") providing for a loan to the Borrower in the principal amount of Japanese Yen One Billion Sixty Million (Y1,060,000), the re-payment of which is guaranteed by the Republic of the Philippines (the "Guarantor") pursuant to a guarantee dated the same date (the "Guarantee"). The terms used herein have the same meanings set forth in the Agreement and the Guarantee. For the purpose of giving this opinion, I have examined such laws, documents, instruments and agreements as I have deemed necessary, including the following: (a) The Agreement; (b) The Guarantee; (c) Republic Act No. 85, as amended; (d) Full Powers, dated July 15, 1981, issued by the President of the Philippines in favor of Minister of Finance Cesar Virata or Assistant Minister of Finance Victor Macalincag and Acting Chairman Rafael Sison; (e) Letter of the Central Bank, dated August 7, 1981, extending "final approval and registration" to the loan covered by the Agreement; (f) Exchange Assurance Certificate of the Central Bank, dated August 7, 1981; and (g) Certificate of the Comptroller of the Borrower, dated August 6, 1981. On the basis of such examination, I am of the opinion that: (1) The Guarantor has full power, authority and legal right to give the guarantee provided for in the Guarantee, to execute and deliver the Guarantee and to perform and observe the terms and provisions of the Guarantee. (2) All acts, conditions and things required to be done and performed and to have happened precedent to the execution and delivery of the Guarantee, and to constitute the same the valid obligations of the Guarantor in accordance with the terms hereof have been done, performed and have happened in due and strict compliance with all applicable laws of the Philippines. (3) All registrations, consents, licenses, and approvals of all governmental agencies, departments and commissions which are necessary for the execution and delivery by the Guarantor of the Guarantee, or for the validity of enforceability hereof, have been duly obtained. (4) The execution, delivery and performance by the guarantor of the Guarantee are duly authorized by law and will not violate any provision of law, statute, decree, rule or regulation of the Philippines, or result in the breach of, or constitute a default under, any treaty or other agreement or instrument relating to External Obligations to which the Guarantor is a party, or by which the Guarantor or any of its properties may be bound or affected, and the Guarantee constitutes the legal, valid and binding obligations of the Guarantor, enforceable in accordance with the terms and provisions hereof. (5) The obligations of the Guarantor under the Guarantee are direct, unconditional and irrevocable obligations carrying the full faith and credit of the Government of the Philippines and such obligations shall rank pari passu in right of payment and in all other respects (whether in respect of priority of lien, pledge, charge or other security of otherwise) with all other External Obligations of the Guarantor, except (i) obligations secured by liens created on property at the time of purchase thereof, as security for the payment of the price of such property, and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the creation thereof. prcd (6) The Guarantee constitutes a private and commercial act of the Guarantor. Neither the Guarantor nor any of its property enjoys any right of immunity from legal proceedings on grounds of sovereignty in respect of any action arising out of, or in connection with, its obligations under the Guarantee, or in respect of execution of judgment rendered in any such action. (7) On the assumption that the Lender is not in fact doing business in the Philippines the qualification by the Lender for admission to do business under the laws of the Philippines does not constitute a condition to, and the failure to so qualify does not, by sole reason thereof, affect, the exercise by the Lender of any right, privilege or remedy afforded to the Lender in, under or in connection with the Guarantee or the enforcement or any such right, privilege or remedy. (8) To the best of my knowledge, after due inquiry, no event has occurred or is continuing which constitutes or which, with the giving of notice or lapse of time or both, would constitute an Event of Default. (9) No provision of law, decree or administrative regulation prohibits, in the event of default on the part of the Borrower, (i) the payment by the Guarantor of all taxes and other charges levied or imposed by the Government of the Philippines or any department, agency, political or administrative subdivision or taxing authority thereof or therein, on the Lender in respect of payments to be made by the Borrower under the Agreement, and (ii) the remittance in full of all payments required from the Borrower under the Agreement or from the Guarantor under the Guarantee, subject to the provisions of Section 74 of the Act establishing the Central Bank of the Philippines (Republic Act No. 265, as amended). (10) The exchange assurance required under Section 9(h) of the Agreement is valid and binding. LLphil (11) The waiver of sovereign immunity in Section 8(f), and the consent jurisdiction in Section 7(e), of the Guarantee are valid acts of the Guarantor enforceable in accordance with their terms. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice