The rollout of the country’s first subway system moved a step closer as the Japanese government extended a 104.5-billion yen or P51.3-billion loan to finance the initial phase of the flagship infrastructure project.
Japan International Cooperation Agency senior representative Tetsuya Yamada told the Inquirer on Thursday that the first tranche of the loan agreement for the underground railroad to be signed today would be slapped an interest rate of 0.1 percent a year and a repayment period of 40 years, including a 12-year grace period.
While the Metro Manila Subway Project Phase 1 is projected to cost P356.9 billion, Japan Prime Minister Shinzo Abe earlier expressed their intention to possibly lend a total of up to 600 billion yen or about P294.8 billion, Yamada said, citing the Japan-Philippines Joint Statement on Bilateral Cooperation for the Next Five Years issued in October.
The subway will be the biggest Philippine infrastructure project to be funded by Japanese official development assistance.
It will connect Mindanao Avenue in Quezon City and Food Terminal Inc. in Taguig City, with a spur line to the Ninoy Aquino International Airport.
The construction of the 36-kilometer subway, whose implementation was green-lighted by the National Economic and Development Authority Board chaired by President Duterte in September, will begin next year.
The subway will be completed by 2025, although three of the 14 stations were targeted to be in operation as early as 2022.
Transportation Secretary Arthur Tugade said last month that they planned to fast-track the partial opening of the subway system to the fourth quarter of 2021.
In a statement posted on its website, Japan’s Ministry of Foreign Affairs (Mofa) said that the subway “will contribute to relieving serious traffic congestion in Metro Manila by meeting growing transportation demand, as well as easing atmospheric pollution and climate change.”
“The new subway is estimated to transport approximately 500,000 passengers per day in 2027 (two years after the completion of the project), and to reduce the time required for moving from Mindanao Avenue station to FTI station to 30 minutes by express train, where it currently takes approximately two hours by car,” Mofa said.
The project is thus expected to contribute to sustainable economic growth through the promotion of investment in the Philippines, Mofa added.
Documents last month showed that Japan would finance 19 infrastructure projects worth at least P753 billion in support of the Duterte administration’s ambitious “Build, Build, Build” program.