Philippines inks P112-B loan agreement with Japan for 2nd tranche of Metro Manila Subway project

The Philippines on Thursday inked a loan agreement for the second tranche of funding for the construction of the Metro Manila Subway, which was earlier targeted to start operations last year.

The latest loan agreement covers ¥253.31 billion or P112.87 billion, extended by the Japan International Cooperation Agency (JICA), payable in 27 years. It will have a grace period of 13 years, for a total maturity period of 40 years.

This follows the initial agreement signed by the Philippines and Japan in March 2018 covering ¥104.53 billion or P47.58 billion, which also has a 40-year total maturity period.

“For the remaining three to four tranches of the total loan, JICA will release the funds based on the project requirements and will be subject to further discussions,” the Department of Finance (DOF) said in an emailed statement.

The National Economic and Development Authority (NEDA) in September revised the Metro Manila Subway cost at P488.48 billion or ¥1.08 trillion.

The bulk of the project will be funded by JICA, accounting for 75.9% or P370.77 billion. The Philippines will finance the remaining 24.1% or P117.71 billion.

In July 2020, Transportation Secretary Arthur Tugade said the Metro Manila Subway would start partial operations by the fourth quarter of 2021, even as construction activities have been delayed.

The project is expected to serve 370,000 passengers daily in its first year of full operations.

The partial operability of the subway comprises the first stations in Quezon City and in Valenzuela City, where the line's depot is also located.

The DOTr said that once completed and fully operational, the Metro Manila Subway will cut down travel time from Quezon City to the Ninoy Aquino International Airport (NAIA) to about 40 minutes. — VBL, GMA News