The governments of the Philippines and Japan signed a P112.87 billion loan agreement, the second tranche funding for the construction of the Metro Manila Subway Project, the country's first-ever underground railway.
Finance Secretary Carlos Dominguez III, on behalf of the Philippine government, and Eigo Azukizawa, the Chief Representative of the Japan International Cooperation Agency (JICA), signed the loan accord during the signing ceremony on Thursday, Feb. 10 for the 253.31 billion Japanese yen loan agreement, equivalent to P112.87 billion, for the Philippines’ first-ever underground railway.
Dominguez thanked the government and people of Japan for continuing to extend financial support for the construction of the Metro Manila Subway, which is one of the flagship projects under President Duterte’s “Build, Build, Build” program.
The second tranche loan extended by Japan for the project is payable in 27 years with a grace period of 13 years, for a total maturity period of 40 years.
This loan agreement follows the earlier accord signed on March 16, 2018 between the Philippines and Japan for the subway project’s first tranche loan of 104.53 billion Japanese yen, which also has a 40-year total maturity period.
The National Economic and Development Authority (NEDA) Board chaired by the President approved the revised total project cost of P488.48 billion for the Metro Manila Subway last Sept. 23.
JICA will finance 75.9 percent of the project through a time-sliced loan totaling P370.77 billion, while the Philippine government will fund the remaining 24.1 percent or P117.71 billion.
Utilizing cutting-edge Japanese tunneling technology, the Metro Manila Subway involves the construction of a 27.5 kilometer railway line from Valenzuela in Bulacan to Bicutan in Taguig City and the NAIA Terminal 3 in Pasay City with a 33.1-kilometer electromechanical system.
The project would also cover the physical integration segment with the North-South Commuter Railway (NSCR) System (i.e., FTI to Bicutan).
It also involves the construction of a depot and 17 stations (two of which will be constructed through a separate loan under the NSCR System), and the procurement of 30 train sets.
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 between JICA and the Department of Transportation (DOTr), the project’s chief implementing agency.
The preparation of the detailed engineering design and bidding documents for the project started in November 2017, financed by a grant from JICA.
In January 2018, the DOTr and JICA also signed a grant-financed technical cooperation agreement for the establishment of the DOTR Railway Office, which is intended to support capacity building for the operation and maintenance of both the Philippines’ current and new railway systems.