Philippines, ADB sign $1 billion loan for Davao City public transport modernization

The Philippine government and the Asian Development Bank (ADB) on Saturday signed a $1-billion loan agreement for the Davao Public Transport Modernization Project (DPTM).

Finance Secretary Benjamin Diokno and ADB Country Director for the Philippines Pavit Ramachandran signed the financing deal at the Acacia Hotel in Agdao, Davao City.

President Ferdinand Marcos Jr. witnessed the signing.

In his remarks, Marcos said the project would have an integrated network of 29 routes, would connect major commercial centers in Davao, and would yield various socioeconomic opportunities for Davaoeños.

“This project aims to support the city of Davao as it progressively expands its economic activities,” the President said.

Marcos said the project had been envisioned as early as 2010.

Diokno, for his part, said the DPTM was “expected to be a model for other cities’ public transit projects.”

Transportation Secretary Jaime Bautista said the project would also launch the country’s biggest electrification initiative as it deploys nearly 400 electric buses upon its operation.

“All these are set to start within the third quarter of 2023,” Bautista said.

The Transportation chief said the P73.37-billion project will be shared by the national government, the local government of Davao City, and the ADB.

In a separate statement, the Department of Finance said the total loan of $1.074 billion would come from the ADB and the lender’s administered funds, such as the Green Climate Fund (GCF) and the ASEAN Infrastructure Fund (AIF).

The GCF component of the loan package, amounting to $50 million, will help finance the procurement of electric buses under the DPTMP.

This will contribute to the country’s first nationally determined contribution (NDC) under the Paris Agreement on Climate Change, which sets a 75% greenhouse gas emission reduction and avoidance target by 2030.

Early this week, the ADB approved the $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.

The project will support the acquisition of some 1,100 modern buses to be operated by the private sector under performance-based contracts.

The fleet would 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 would 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 bus location and automatic fare collection systems.

Marcos also emphasized that families who would be displaced by the implementation of the project would be “properly compensated, and if need be relocated.”

“But, I assure everyone that this project will also include social development interventions such as financial and non-financial assistance for those who are displaced,” the President said.

Marcos urged the Department of Transportation (DOTr), the project’s implementing agency, to accomplish the DPTM within the set timeline and “ensure it affects the least number of people and activities as possible.”

The project covers 672 kilometers with 29 routes that connect key areas in Davao City to Panabo City, Davao Del Norte.

The DPTM is projected to start initial operations by 2024.

“I assure my fellow Filipinos that your government is working hard to improve the country’s transportation systems, operations, and management for the benefit of present and future generations,” Marcos said. — DVM, GMA Integrated News