ADB OKs $1-B loan for Davao City public transport modernization

The Asian Development Bank (ADB) on Thursday approved a $1-billion loan to finance the modernization of public transportation in Davao City, its largest road-based public transport project in the Philippines to date.

In a statement, the ADB said the loan will finance the Davao Public Transport Modernization Project, which will support the acquisition of some 1,100 modern buses to be operated by the private sector under performance-based contracts.

The fleet is set to cut 60% of the annual greenhouse gas emissions from public transport in Davao City, the third-largest city in the country in terms of population.

The project is expected to cater to an estimated 800,000 passengers daily through 1,000 bus stops, five bus depots, and three bus terminals under an intelligent transport system that includes a bus location system and automatic fare collection systems.

"The project is set to transform the quality of Davao City’s public transport and support the city’s rapid economic growth with a low-carbon and climate-resilient bus system," ADB senior transport specialist for Southeast Asia Shuji Kimura said.

"Not only will this support the Philippines’ climate goals, but it will also help to improve the lives of vulnerable populations, especially women and the young who use public transport daily," he added.

The ADB said the ASEAN Infrastructure Fund is cofinancing the project with a $10-million loan under the ASEAN Catalytic Green Finance Facility (ACGF), while the Green Climate Fund is providing a $50-million loan under the ACGF’s Green Recovery Program.

A $1-million technical assistance grant will also be handed out to the Department of Transportation (DOTr) and the local government of Davao City to develop staff capacities to oversee bus operations and the overall implementation of the project.

In April, the ADB said it had earmarked about $4 billion worth of loan financing to support growth initiatives in the Philippines, where it is headquartered.

It also has a $30-million lending program on standby for project development and a monitoring facility for public-private partnerships.

The latest data available from the Bureau of the Treasury (BTr) show that the national government’s outstanding debt stood at P13.911 trillion as of end-April, reflecting a P52.24-billion increase from the previous month.

Earlier this month, Budget Secretary Amenah Pangandaman was reported to have indicated that next year’s borrowings would amount to P2.46 trillion, including P1.968 trillion to be sourced locally and P492 billion from overseas creditors. —VBL, GMA Integrated News