The Minister, Office of Budget and Management
        The Governor, Central Bank of the Philippines
        The Chairman, Philippine National Oil Company
        The President, National Power Corporation
        The Administrator, National Electrification Administration
        The Administrator, National Irrigation Administration
        The Administrator, Local Water Utilities Administration
        The Administrator, Export Processing Zone Authority
        The General Manager, Philippine Ports Authority
        The General Manager, National Housing Authority
        The General Manager, Light Rail Transit Authority
        The General Manager, Philippine National Railways
        The General Manager, Metro Manila Transit Corporation
        The General Manager, National Development Company
        The General Manager, Metropolitan Waterworks and Sewerage System

1.    This Letter of Instruction shall apply to the National Government and the thirteen non-financial public sector corporations named above.

2.    The National Treasury, and the non-financial public sector corporations named above shall deposit the peso equivalent of all their foreign exchange obligations in arrears, including penalties, if any, as October 15, 1984 and still outstanding, computed on the basis of the exchange rate prevailing on the date of deposit, in a blocked account with the Central Bank not later than December 28, 1984. It is understood that all foreign exchange obligations not subject to rescheduling falling due after October 15, 1984 shall be settled as they mature.

3.    The National Treasury and non-financial public sector corporations named above shall likewise deposit in a blocked account with the Central Bank the peso equivalent of principal amortizations, interest and penalties on their foreign obligations subject to rescheduling falling due on or before December 31, 1985 except where agreements have been reached for the financing of the Nuclear Power Program. The peso deposit shall be made on the date of original maturity, regardless of the new maturities which may result from rescheduling. Pesos for amortizations, interest and penalties which fell due before the effectivity date of this Letter of Instruction shall be deposited not later than December 28, 1984. The deposit shall be calculated on the basis of the exchange rate prevailing on the date of the deposit and the amount due at the original maturity.

4.    Suppliers credit in arrears as of October 15, 1984 and still outstanding that are not subject to rescheduling will be covered by regulations to be issued by the Central Bank on the matter.

5.    For the foreign exchange obligations in arrears which are not subject to rescheduling, as mentioned in paragraph 2, the Central Bank shall thereupon assume the foreign liability for which the peso equivalent has been deposited with it, including all interests accruing thereafter. For the foreign exchange obligations subject to rescheduling as mentioned in paragraph 3 above, the Central Bank shall thereupon extend forward exchange cover for the portion with which the peso equivalent has been deposited with it.

6.    In the case of foreign obligations covered by foreign exchange cover contracts to the Central Bank, the pesos shall be delivered on the maturity date and at the exchange rate stipulated in the foreign exchange cover contracts.

7.    Pesos shall be deposited by the non-financial public sector corporations above named with the Central Bank through commercial banks.

8.    The Central Bank shall adopt a separate scheme for the Philippine National Bank, including the National Investment and Development Corporation, the Development Bank of the Philippines and the Philippine Export and Foreign Loan Guarantee Corporation.

9.    All the concerned entities are hereby instructed to undertake the appropriate steps to effect the above measures.

Since 19.07.98.