The Secretary of Industry
        The Secretary of Foreign Affairs
        The Secretary of Planning
        The Secretary of Agriculture
        The Secretary of Natural Resources
        The Chairman, Board of Investments
        The Governor, Central Bank of the Philippines
        The Chairman, Philippine National Oil Company
        The Chairman, Philippine Coconut Authority
        The Chairman, Philippine Export Council
        The President International Trading Corporation
        The President, Philippine Exchange Company
        The Administrator, National Grains Authority
        The Administrator, Fertilizer Industry Authority
        The Administrator, Cement Industry Authority
        The President, National Steel Corporation
        All other agencies concerned.

I.    COMMODITY PATTERNS

1.    The import and export of goods between the Philippines and any of the Socialist and other centrally-planned economy countries shall be in accordance with the laws and rules in force in the respective countries applicable to the import and export of the commodity involved.

2.    For export of goods to the aforesaid countries, particular emphasis shall be placed on export products listed in the trade and/or economic agreement with the importing country, if any, as well as those listed in the Export Priorities Plan of the Board of Investments, and export products of enterprises within the export processing zones and industrial estates established by the government.

3.    For importation of goods from the aforesaid countries, priority shall be given to commodities which are required in government-funded or sponsored projects, particularly in agriculture and health; and raw materials and machinery and equipment not locally available in sufficient quantities, of comparable quality and at competitive prices, needed by preferred industries declared by the government, such as those listed in the Investment Priorities Plan, Export Priorities Plan (List B), Public Utilities Priorities Plan and the Tourism Priorities Plan, and by industries operating within the Export Processing Zone and Phividec industrial estate and other similar establishments that may be organized by the government.

4.    No importation of raw materials, machinery and equipment shall be allowed in industries indicated in the Overcrowded Industries List of the Investment Coordinating Committee, as well as items the importation of which is prohibited.

II.    CHANNELS OF TRADE

1.    The trade, direct or indirect, between the Philippines and any of the Socialist and other centrally-planned economy countries shall upon issuance hereof, be undertaken by or coursed through the Philippine International Trading Corporation. This shall apply to the export and import of all commodities or products including those specified for export or import by expressly authorized government agencies.

2.    Inspection of commodities imported into and exported from the Philippines and these countries shall be conducted in accordance with the agreement of the parties or follow the normal procedures, i.e., through an independent international superintendent or surveyor acceptable to both parties.

3.    Trade communication shall be free and exchanges of legitimate trade missions and traders between the Philippines and Socialist and other centrally-planned economy countries shall be allowed, subject to any proper condition which the Department of Foreign Affairs may impose, and to the guidelines established by the Department of Trade in coordination with the Philippine Export Council.

4.    The Philippine International Trading Corporation shall participate in all official trade and economic discussions between the Philippines and Socialist and other centrally-planned economy countries.

5.    In the event of disputes in any commercial transaction between parties from the Philippine and Socialist and other centrally-planned economy countries, the same shall be settled in accordance with the provisions of the contract between the parties, or the trade or economic agreement entered into between the Philippines and the country of the other party, if any, or with any other form of settlement mutually acceptable to both parties.

III.    PAYMENT ARRANGEMENTS

1.     Payments shall be effected through prescribed instruments acceptable to the Central Bank of the Philippines and those of the Socialist and other centrally-planned economy countries concerned, in accordance with their respective foreign exchange regulations, and shall be in convertible currencies acceptable to the Central Bank of the Philippines.

2.    Payments through clearing arrangements providing for swing credits with the balance to be settled in convertible currencies may be adopted on a case-to-case basis mutually acceptable to the competent authorities of both Governments. Nothing herein shall preclude the parties from entering into any other payment arrangements, subject to the approval of the monetary authorities of both Governments.

3.    The establishment of normal banking correspondent relations between Philippine banking institutions and the banking institutions of Socialist and other centrally-planned economy countries shall be allowed.

IV.    MONITORING

V.    SPECIAL PROVISIONS

Since 19.07.98.