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                                                     June 29, 1993
Secretary of Finance
Deparment of Finance
Manila
Philippines
Dear Sir:
            Philippines: Extension of Closing Date for
                         Financial Sector Adjustment Loan Loan (FSAL)
                         (Loan No. 3049-PH)
      Thank you for the letter of June 25, 1993 from Mr. Romeo L.
Bernardo, Officer-in-Charge, Undersecretary of Finance, in which a
further extension of the Closing Date for the above Loan from June
30, 1993 until November 30, 1993 was requested.
      The Bank is very pleased to note that the new Central Monetary
Authority (CMA) Act was enacted on June 10, 1993, and that it
contains almost all the amendments required under Condition 1 of the
second tranche release conditions (Schedule 4) to the Loan Agreement
as well as provisions which will allow the Monetary Board to
implement a financial restructuring of the central bank.  We are
pleased to note that the Government is in the process of preparing
a list of assets and liabilities which can be transferred to the
Banko Sentral and it will endeavour to constitute the restructuring
committee by July 15, 1993.  Timely completion of these critical
steps should permit Government of the Philippines to restructure the
central bank within the stipulated time period.  Completion of
financial restructuring of the central bank to the Bank's
satisfaction will comply with the Condition 10 of the second tranche
release conditions of the Loan Agreement.
      Given the enactment of the CMA ACT and that the main
objectives of the Loan continue to be achievable, the Bank agrees to
extend the Closing Date of the above Loan to November 30, 1993 to
permit the completion of the financial restructuring of the central
bank to the Bank's satisfaction by November 30, 1993, and to allow
the issues of the adequacy of PDIC's capital and intermediation
costs to be addressed as part of the financial restructuring of the
central bank.
      Kindly confirm your agreement to the foregoing by signing and
dating the form of confirmation set forth and returning this letter
at your earliest convenience (but not later than June 30, 1993).  A
signed duplicate original of this letter is enclosed for your
records.  This letter becomes effective as of the date first above
written once it has been fully executed by you and returned to us.
                                         Sincerely yours,
                                         INTERNATIONAL BANK FOR
                                           RECONSTRUCTION AND DEVELOPMENT
                                         Vineet Nayyar
                                         Acting Director
                                         Dept. I, East Asia and
Pacific Region
AGREED AND CONFIRMED:
REPUBLIC OF THE PHILIPPINES
By: Ernest C. Leung, Acting Secretary
Date: June 30, 1993
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cc:   Governor
      Central Bank of Philippines
      Manila Philippines
      OECF
      25/F Pacific Star Building
      Makati Avenue Cor. Sen. Gil Puyat Avenue
      Manila, Philippines
      JEXIM
      14/F Pacific Star Building
      Makati Avenue Cor.Sen.Gil Puyat Avenue
      Manila
      Philippines
Cleared with and cc: Messrs. Fo~c (IEGEA)
cc: Messrs./Mmes. El Maaroufi (EAPVP); Madavo (o/r), Ahmed ~AlDR);
Ilcram, Kharas,
           Ball~i~i (EAlCO); Dalla (EAlIE); Hassan (IEGEA); Abraham
(LOAAS);
           Allen (RMP)
           Asia Information Center