Transfer of the Commonwealth Trading Bank Loan Contract to the Republic of the Philippines

March 11, 1976

LETTER OF INSTRUCTIONS NO. 381

WHEREAS, the Philippine Aerospace Development Corporation signed a purchase commitment with Government Aircraft Factories of Australia on 20 June 1974 for twelve (12) NOMAD aircraft and related spares costing A$5,504,741.00. casia

WHEREAS, a loan was obtained from Commonwealth Trading Bank to finance 90% of the supply contract amounting to A$4,954,267.00.

WHEREAS, in line with the financial re-alignment of PADC projects, PADC has recommended the transfer of the supply contract to the Philippine Air Force and of the loan contract to the Department of Finance in order to relieve PADC of the significant pressure added to its cash flow and debt-servicing requirements and improve its debt-equity structure.

WHEREAS, under Section 11 of Presidential Decree 696, it is expressly provided that the President, by himself, or through his duly authorized representative, absolutely and unconditionally guarantees in behalf of the Republic of the Philippines, the loans of PADC as primary obligor up to a maximum amount of one billion dollars.

In view thereof, I hereby instruct:

1. The Secretary of Finance to effect the transfer of the Commonwealth Trading Bank loan contract to the Republic of the Philippines and to issue the implementing rules and regulations governing such transfer. cdt

2. The Governor of the Central Bank is to issue implementing orders to effect the necessary changes brought about by such transfer in the Central Bank record subject to existing Monetary Board regulations and policies.

3. The Secretary of National Defense to assume the implementation of the supply contract.

This instruction shall take effect immediately.

DONE in the City of Manila, this 11th day of March, in the year of Our Lord, Nineteen Hundred and Seventy-Six. cd i