<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-K
Annual report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Fiscal year ended December 31, 1997
GOVERNMENT TRUST PH-1
(Exact name of Registrant as specified
in its governing instrument)
State or other jurisdiction of incorporation:
New York
Commission File Number:
0-19553
IRS Employer Identification No.:
13-6982194
c/o The Chase Manhattan Bank
Corporate Trustee Administration
450 West 33rd Street
New York, New York 10001
(212) 946-8608
_________________________
(Address, including zip code, and telephone number of principal
executive offices )
Securities Registered Pursuant to Section 12(g) of the Act :
7.50% Current Coupon Certificates, Class PH-1
( Title of Class )
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports ) , and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Semiannual Report as of February 18, 1997 Exhibit B
Semiannual Report as of August 15, 1997 Exhibit C
Annual Report as of March 31, 1998 Exhibit D
<PAGE>
Part I
Item 1. Business
Not Applicable .
Item 2. Properties .
See list of assets set forth in Exhibit A.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters .
(a) Market Information .
Certificates are not traded on any market or exchange.
(b) Holders .
The number of registered holders for Zero Coupon
Certificates, Class PH-1on December 31, 1997 was 1.
(c) Dividends .
$981,375.00 distributed to holders for Zero Coupon
Certificates, Class PH-1 on February 18, 1997.
$4,499,375.00 distributed to holders for Zero Coupon
Certificates, Class PH-1 on August 15, 1997.
Item 6. Selected Financial Data
Not Applicable.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations .
Not Applicable.
Item 8. Financial Statements and Supplementary Data.
Not Applicable .
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
Not Applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Not Applicable.
Item 11. Executive Compensation .
Not Applicable.
Item 12 . Security Ownership of Certain Beneficial Owners and
Management
(a) Security ownership of certain beneficial owners.
______________________________________________________________________________
(1) Title of (2) Name and (3) Amount and (4) Percent
Class address nature of of class
of benefi- Beneficial
cial owner ownership
______________________________________________________________________________
Zero Coupon Cede & Co. $ 22,652,000 100.00%
Certificates, P.O. Box 20
Class PH-1 Bowling Green Station
New York, NY 10004
_______________________________________________________________________________
(b) Security ownership of management
Not Applicable.
(c) Changes in control.
Not Applicable.
<PAGE>
Item 13. Certain Relationships and Related Transactions.
(a) Transactions with management and others.
Not Applicable.
(b) Certain business relationships.
Not Applicable .
(c) Indebtedness of management .
Not Applicable .
(d) Transactions with promoters.
Not Applicable .
PART IV
Item 14. Exhibits, Financial Schedules, Reports on Form 8-K.
(a) The following is a list of documents filed as part
of this report :
Exhibit Document
A List of Assets held
by Trust on
December 31, 1997
B Semiannual Report
as of February 18, 1997
C Semiannual Report as
of August 15, 1997
D Annual Report as of
March 31, 1998
(b) Not applicable
(c) Not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Government Trust PH-1
(Registrant)
By : ______Dennis Kildea________
Assistant Vice President
Date : March 31, 1998
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By : ______Marcus Gustafson_____________________
Vice President
Date : March 31, 1998
By : ______Dennis Kildea__________
Assistant Vice President
Date : March 31, 1998
<PAGE>
Exhibit A
REPUBLIC OF THE PHILIPPINES
GOVERNMENT TRUST PH-1
U. S. Government Securities
Maturity Par Amount Coupon
February 15, 1998 467,000 0.0000
August 15, 1998 453,000 0.0000
February 15, 1999 439,000 0.0000
August 15, 1999 424,000 0.0000
February 15, 2000 410,000 0.0000
August 15, 2000 372,000 0.0000
Republic of the Philippines PH-1 Note
Principal Amount Rate of
Outstanding Interest Due Date
$ 22,652,440.18 7.53% Aug 15, 2000
<PAGE>
Exhibit B
THE CHASE MANHATTAN BANK
450 West 33rd Street
New York , New York 10001
Trustee's Semiannual Report
To the Holders of
Government Trust PH-1 7.50% Current Coupon Certificates
( Republic of the Philippines FMS Refinancing )
and
Defense Security Assistance Agency
The Pentagon
Washington , DC 20301-2800
Attention of the Comptroller, DSAA
i. On February 18, 1997, the Certificate Payment Date, the aggregate amount
distributed to the Holders was $981,375.00. The portions thereof allocable
to the principal and interest payments on the Related Note was $882,375.00
and to payments from the Securities Trust $99,000.00.
ii. The aggregate Initial Amount of the Certificates issued by such Trust and
remaining outstanding after such distribution is $26,170,000.00.
iii. The unpaid principal amount of the Related Note following such
distribution is $ 26,170,440.18.
iv. The sum of the amount referred to in (i) above, plus the amount paid to
the Trustee in respect of the Trustee's fees and expenses was less than
the sum of ninety percent (90%) of the amount required to have been paid by
the Borrower on the Related Note(s) on the immediately preceding Note Payment
Date plus the payment received by the Trustee from the related Securities
Trust on the Certificate Payment Date in the amount of $811.92.
No Payment Default has occurred and is continuing since our previous report.
To the best of my knowledge and belief, this Semiannual Report is complete
and accurate.
By: __________________
Dennis Kildea
Trust Officer
Report dated as of February 18, 1997
(Tax ID No. 13-6982194)
<PAGE>
Exhibit C
THE CHASE MANHATTAN BANK
450 West 33rd Street
New York , New York 10001
Trustee's Semiannual Report
To the Holders of:
Government Trust PH-1 7.50% Current Coupon Certificates
( Republic of the Philippines FMS Refinancing )
and
Defense Security Assistance Agency
The Pentagon
Washington , DC 20301-2800
Attention of the Comptroller, DSAA
i. On August 15, 1997, the Certificate Payment Date, the aggregate amount
distributed to the Holders was $4,499,375.00. The portions thereof allocable
to the principal and interest payments on the Related Note was $4,048,375.00
and to payments from the Securities Trust $451,000.00.
ii. The aggregate Initial Amount of the Certificates issued by such Trust
and remaining outstanding after such distribution is $22,652,000.00.
iii. The unpaid principal amount of the Related Note following such
distribution is $22,652,440.18.
iv. The sum of the amount referred to in (i) above, plus the amount paid to
the Trustee in respect of the Trustee's fees and expenses was less than
the sum of ninety percent (90%) of the amount required to have been paid by
the Borrower on the Related Note(s) on the immediately preceding Note Payment
Date plus the payment received by the Trustee from the related Securities
Trust in respect of such Certificate Payment Date in the amount of $1,011.93.
No Payment Default has occurred and is continuing since our previous report.
To the best of my knowledge and belief, this Semiannual Report is complete
and accurate.
All capitalized terms used herein have the meanings assigned to them in the
Declaration of Trust dated as of September 20, 1991.
By: __________________
Dennis Kildea
Trust Officer
Report dated as of August 15, 1997
(Tax ID No. 13-6982194)
<PAGE>
Exhibit D
THE CHASE MANHATTAN BANK
450 West 33rd Street
New York, New York 10001
Trustee's Annual Report
To the holders of:
- - Government Trust PH-1 7.50% Coupon Certificates, Class PH-1
(Republic of the Philippines FMS Refinancing)
- - Defense Security Assistance Agency
The Pentagon
Washington, D.C. 20301-2800
Attention of the Comptroller , DSAA
i. During the year ending December 31, 1997, $5,480,750.00
was distributed to the holders of the Current Coupon Certificates
and this amount is allocable as follows:
a. 90% from interest payments made on the Republic of the Philippines
Promissory Note on February 3, 1997 and August 1, 1997.
b. 10% from the proceeds of maturities of United States Treasury Strips
due February 18, 1997 and August 15, 1997.
ii. The aggregate Initial Amount of the Certificates issued by such Trust
and remaining outstanding after such distributions is $22,652,000.00.
iii. The unpaid principal amount of the Republic of the Philippines
Promissory Note following the February 18, 1997 and August 15, 1997
distributions is $22,652,440.18.
iv. The sum of the amount referred to in (i), above, plus the amount paid
to the Trustee in respect of the Trustee's fees and expenses was less than
the sum of ninety percent (90%) of the amount required to have been paid by
the Borrower on the Related Note(s) on the immediately preceding Note
Payment Dates plus the payment received by the Trustee from the Related
Securities Trust in respect of such Certificate Payment Dates in the amount
of $1,823.85, representing excess funds.
Please be advised that no Payment Default has occurred and is continuing with
respect to the February 18, 1997 and August 15, 1997 Certificate Payment Dates.
There have been no payments under the Guaranty with respect to the February 3,
1997 and August 1, 1997 Note Payment Dates next preceding the February
18, 1997 and August 15, 1997 Certificate Payment Dates.
To the best of my knowledge and belief, this Annual Report is complete
and accurate. All capitalized terms used herein have the meanings assigned
to them in the Declaration of Trust dated as of September 20, 1991.
By ___________________________
Dennis Kildea
Assistant Vice President
Report dated as of March 31, 1998
Tax I.D. No. 13-6982194
<PAGE>
INDEPENDENT AUDITORS' REPORT
Government Trust PH-1:
We have audited the accompanying balance sheet of Government Trust PH-1
(the "Trust") as of December 31, 1997 and the related statements of income,
cash flows and changes in trust balance for the year then ended. These
financial statements are the responsibility of the management of the Trust.
Our responsibility is to express our opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of the securities that the Depository,
Chase Manhattan Bank, was holding as of December 31, 1997 for the account
of the Republic of Philippines, for the purpose described in Note 4 of the
notes to financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Trust at December 31, 1997 and the
results of its operations, cash flows and changes in Trust balance for the
year then ended in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
March 13, 1998
New York, New York
<PAGE>
Government Trust PH-1
Balance Sheet
December 31, 1997
Assets
Loan Note Receivable - at
amortized cost, net of
unamortized discount of $76,317 $22,575,683
Accrued Interest Receivable 687,017
__________
Total Assets $23,262,700
Liabilities and Trust Balance
Accrued Expenses Payable $ 3,296
Trust Balance - Comprised
of Owners' Equity in Government
Trust Certificates 23,259,404
Total Liabilities and ___________
Trust Balance $23,262,700
The accompanying notes are an integral part of these financial statements.
<PAGE>
Government Trust PH-1
Statement of Income
For the year ended December 31, 1997
Interest Income on the Loan Note $1,878,726
Trustee Fees and other Expenses (6,807)
___________
Net Income $1,871,919
The accompanying notes are an integral part of these financial statements.
<PAGE>
Government Trust PH-1
Statement of Cash Flows
For the year ended December 31, 1997
Increase (Decrease) in Cash
Cash Flows from Financing Activities:
Distributions to Certificate Owners
and the Republic $(5,482,191)
Trustee Fees and other expenses paid (6,410)
___________
Net Cash Flows used in Financing Activities $(5,488,601)
Cash Flows from Investing Activities:
Principal and Interest Received
on the Loan Note (5,488,601)
__________
Net Cash Flows from Investing Activities (5,488,601)
__________
Net Decrease in Cash 0
__________
Cash Balance at the beginning of period 0
__________
Cash Balance at the end of period $ 0
__________
The accompanying notes are an integral part of these financial statements.
<PAGE>
Government Trust PH-1
Statement of Changes in Trust Balance
For the Year Ended December 31, 1997
Trust Balance at January 1, 1997 $26,869,676
Net Income 1,871,919
Distributions to Certificate Owners
and the Republic (5,482,191)
_________
Trust Balance at December 31, 1997 $23,259,404
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOVERNMENT TRUST PH-1
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
Note 1. Organization and Operations
Government Trust PH-1 (the "Trust") is a limited purpose trust established
under the laws of the state of New York pursuant to a Declaration of Trust
(the "Declaration") between the Trust and Chase Manhattan Bank, as Trustee
(the "Trustee"). The Trust was created for the sole purpose of the issuance
and sale of a single class of Current Coupon Certificates (the "Certificates").
The assets of the Trust consist of a Promissory Note (a "Loan Note") from
the Republic of the Philippines (the "Republic"). The Loan Note is backed
by a full faith and credit guaranty (the "Guaranty") issued by the United
States of America, acting through the Defense Security Assistance Agency
of the Department of Defense (the "DSAA"), of the due and punctual payment
of 90% of all payments of principal and interest due on the Loan Note (the
"Guaranteed Portion") and a security interest in certain collateral,
consisting of non-callable securities issued or guaranteed by the United
States Government, sufficient to pay the remaining 10% of all payments of
principal and interest due on the Loan Note (the "Unguaranteed Secured
Portion"). The Loan Note and Certificates are not subject to prepayment or
acceleration.
In connection with the issuance of the Certificates, underwriting discounts
of $261,270 and a portion of the total offering expenses of approximately
$326,814 associated with the offering of the Trust and the simultaneous
offering of Government Trust PH-2, similar in organization and operation
to the Trust, were paid out of the proceeds of the Trust.
Note 2. Loan Note
The Loan Note in the original principal amount of $58,060,440 evidences a
loan made by the Trust to the Republic subject to the terms and conditions
of a Loan Agreement (the "Loan Agreement") between the Trust and the
Republic. The proceeds from the Loan Note were used to prepay certain loans
made to the Republic from the Federal Financing Bank. Semiannual payments
of interest at an annual rate of 7.53% are due on the Loan Note on each
February 1 and August 1 (each a "Note Payment Date"). On February 1, 1997
there was no scheduled principal payment; on August 1, 1997, the Republic
made its scheduled payment of $3,518,000, along with interest thereon.
Scheduled principal payments are due on each Note Payment Date
as follows:
<PAGE>
Payment Date Principal Payment
___________ ______________
(000's)
February 1998 3,815
August 1998 3,815
February 1999 3,815
August 1999 3,815
February 2000 3,815
August 2000 3,577
The Government of the United States, acting through the DSAA, has agreed to
guarantee the repayment of the Guaranteed Portion of amounts due to the Trust
under the Loan Note. The Republic has also agreed to pledge certain
collateral as security for the repayment of the Unguaranteed Secured Portion,
as more fully described in Note 4. The Loan Note is carried on the balance
sheet of the Trust at amortized cost. The estimated fair value of the
Loan Note approximates the fair value of the Certificates. The estimated
fair value of the Certificates at December 31, 1997 was approximately $26.5
million. The estimate of the fair value of the Certificates is based upon
the present values of the cash flows using risk-adjusted spreads to the
U.S. Treasury curve.
Although management of the Trust is not aware of any factor that would
significantly affect the estimated fair value of the Loan Note or the
Certificates, the Loan Note and the Certificates have not been revalued for
purposes of these financial statements since that date and, therefore,
current estimates of fair value may differ significantly from the amount
presented herein.
Note 3. The Current Coupon Certificates
On September 30, 1991, the Trust issued Certificates in the aggregate
principal amount of $58,060,000, bearing interest at an annual rate of
7.5% and having a final maturity date of August 15, 2000.
Each of the Certificates evidences an undivided fractional interest in
the Trust, and represents the right to receive a portion of the semiannual
payments due on the Loan Note held by the Trust.
Semiannual payments of interest on the Certificates are due on February 15
and August 15 of each year (each a "Certificate Payment Date"). Payments
of principal are also due on each Certificate Payment Date through August
2000. On February 15, 1997, the Trust made its scheduled interest and
principal payment of $4,499,375. Scheduled payments are due on each
Certificate Payment Date as follows:
<PAGE>
Payment Date Principal Payment
February 1998 4,664,450
August 1998 4,521,387
February 1999 4,378,325
August 1999 4,235,262
February 2000 4,092,200
August 2000 3,711,137
On February 15, 1998 the Trust made its scheduled payment of $4,664,450,
along with interest thereon.
Note 4. The Collateral
In accordance with the Collateral Depositary Agreement (the "Depositary
Agreement") between the Republic, the Trustee, and Chase Manhattan Bank
as depository (the "Depository"), and in order to provide security for the
payment of the Unguaranteed Secured Portion, the Republic has pledged
certain collateral, consisting of non-callable securities issued or guaranteed
by the United States Government (together with the proceeds thereof, the
"Collateral"). The Collateral is of such amounts and has such payment dates
as to enable the Trustee to receive on or immediately prior to each
Certificate Payment Date an amount sufficient to pay the Unguaranteed
Secured Portion if timely payment on the Loan Note has not been received
by the related Note Payment Date. All of the Collateral was deposited with
the Depository on the date that the loans evidenced by the Loan Note were
made by the Trust to the Republic.
Note 5. The Trustee
Pursuant to the Declaration the Trustee established a separate trust account
for the Trust. All payments received with respect to the Loan Notes, the
Guaranty and any relevant Collateral are deposited in the trust account for
the benefit of the holders of the Certificates after deducting the fees of
the Trustee, the Depository and any additional expenses of the Trust. Any
excess funds remaining in the trust account after the payment of interest
and principal on the Certificates will revert back to the Republic to the
extent such funds were provided by the Republic but not needed for the above
purpose.
Note 6. Income Taxes
The Trust is classified as a Grantor Trust and will not be subject to Federal
income taxes. Each Certificate holder is treated for Federal income tax
purposes as the owner of a pro rate undivided fractional interest in the
assets held by the Trust. The difference between the financial reporting
and income tax bases of the Trust's assets and liabilities is not significant.
