THE Philippines signed on Thursday a JPY 253.31 billion (about P112.87 billion or $2.2 billion) loan agreement with Japan, assuring the country’s second tranche funding from the bilateral partner for the construction of the Metro Manila Subway Project.
Finance Secretary Carlos G. Dominguez III and Japan International Cooperation Agency (Jica) Chief Representative Eigo Azukizawa signed the loan accord for the Philippines’ first-ever underground railway.
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.
Back in March 16, 2018, the Philippines and Japan signed the JPY 104.53 billion (about P47.58 billion or $933.73 million) first tranche loan agreement for the subway project. This accord also has a 40-year total maturity period.
For the remaining three to four tranches of the total loan, the Department of Finance said in a statement that 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.
Dominguez thanked the government and the people of Japan for continuing to extend financial support for the construction of the Metro Manila Subway, one of the flagship projects under President Duterte’s “Build, Build, Build” infrastructure program.
Also present at the signing ceremony was Japan Ambassador to the Philippines Kazuhiko Koshikawa and Transportation Undersecretary for Railways Timothy John Batan.
The National Economic and Development Authority (Neda) Board chaired by the President approved the revised total project cost of P488.48 billion (about JPY1.08 trillion or $9.58 billion) for the Metro Manila Subway on September 23 last year.
Jica will finance 75.9 percent of the project through a time-sliced loan totaling P370.77 billion (about JPY804.46 billion or $7.27 billion), while the Philippine government will fund the remaining 24.1 percent or P117.71 billion (about JPY273.66 billion or $2.31 billion).
Utilizing cutting-edge Japanese tunneling technology, the Metro Manila Subway involves the construction of a 27.5-kilometer (km) railway line from Valenzuela in Bulacan to Bicutan in Taguig City and the Naia Terminal 3 in Pasay City with a 33.1-km electromechanical system.
The project will 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.
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.