PHL, Japan to sign Metro Manila subway loan deal in March

The Philippines and Japan are signing the first tranche of a loan agreement for the P355.6-billion Metro Manila subway project next month, Budget Secretary Benjamin Diokno said Wednesday.

The amount of the first tranche and how much of the project cost will actually be shouldered by the Japanese and Philippine governments are still under negotiation, the Cabinet official noted.

“The Metro Manila subway project, with the first tranche of the loan due for signing in March 2018,” Diokno said in a breakfast forum in Manila.

“Since this is a loan, maliit lang ‘yung shouldered natin. Much of the project will be funded by the Japanese,” he said.

On the sidelines of the 31st Association of Southeast Asian Nations Summit and Related Summits last November, Foreign Affairs Secretary Alan Peter Cayetano and Japanese Ambassador to the Philippines Kojie Haneda exchanged notes for the Metro Manila subway project.

Estimated to cost P355.6 billion or ¥104.53 billion, the project will be funded by official development assistance (ODA) from Japan under the following loan terms:

• 0.1% a year interest rate on the loan and 0.01% a year on consulting services

• 28-year repayment term after a grace period of 12 years

• Procurement terms tied to Japan

Diokno said earlier the construction of the subway is set to begin in the third quarter of 2018.

The project covers a 25.3-kilometer subway connecting the National Capital Region north and south, from Mindanao Ave. in Quezon City to Ninoy Aquino International Airport in Pasay City. It comprises 13 stations.

The project is expected to reduce commuting time from Quezon City to Taguig City to 31 minutes.

By the fourth quarter of 2025, the subway is expected to commence partial operations with the completion date sometime in 2027.

During a meeting between Philippine and Japanese officials in Cebu on Monday, Diokno said both sides affirmed their commitment to streamline the approval process for infrastructure projects in the pipeline for Japanese loan and grant financing.

“Beyond infrastructure, the Japanese delegation also expressed its support for the Marawi rehabilitation efforts ... In fact, the Japanese government is set to deliver heavy machinery to aid in the Marawi reconstruction efforts in March 2018,” Diokno said.

Apart from the Metro Manila subway, other major projects for Japanese financing are the Arterial Road Bypass Phase III; Philippine National Railways North 2, spanning Malolos to Clark; PNR South Commuter, which runs from Manila to Los Baños; Davao City Waste-to-Energy; Pasig-Marikina Travel Improvement; and MRT3 rehabilitation and improvement. —VDS, GMA News