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PH, Japan seals new loan agreement for Metro Manila Subway construction

The loan will be used for constructing stations, underground tunnels between stations.


MANILA, PHILIPPINES – Japan has remains committed to assisting the Philippines with infrastructure development by signing a new loan deal for the building of the country’s first underground rail line.

Japan is providing additional official development assistance (ODA) loan of up to $2.1bn (JPY253.3bn) to support Phase 1 of the Metro Manila Subway Project in the Philippines.

On February 10, Japan International Cooperation Agency Philippines Representative Azukisawa Eigo and Finance Secretary Carlos Dominguez signed the Japanese government’s official development aid (ODA).

The first tranche of funds, totaling 104.53 billion, was signed in March 2018.

Photo from the Japanese Embassy in the Philippines

This second tranche of finance for the Metro Manila Subway (MMS), according to Ambassador Koshikawa Kazuhiko, demonstrates Japan’s commitment to assisting the country’s development.

“The Metro Manila Subway was first planned in the 1970s, but it remained a plan for about half a century. Through the strong push and determination of the Duterte administration, this “project of the century” is now steadily progressing. I am pleased that our tunnel boring machine will soon start excavating under the Metro Manila area in the 2nd quarter of this year,” he said. 

Kazuhiko also believes “the Metro Manila Subway will serve as one driving force to revitalize the Philippine economy,” assuring that “Filipinos can count on Japan to continuously extend our utmost support until this project is successfully completed.”

The Metro Manila Subway Project will include the building of a 27-kilometer subterranean train route with 15 stations.

It is the first subway in the Philippines and will connect Valenzuela City in Metro Manila’s northern outskirts to Pasay City in its southern outskirts.

Photo from the Japanese Embassy in the Philippines

This project is planned to fulfill growing transportation needs while alleviating traffic congestion in the Metro Manila area.

The financing will be utilized to construct stations, underground tunnels connecting stations, a depot, and other public works projects. It will also be used to fund the purchase of rail systems and rolling stock.

It will also be used for consultancy services such as tender assistance, construction supervision, and Transit Oriented Development help.

The Japanese ODA financing for this project, as well as Japanese technology, will be subject to Special Terms for Economic Partnership (STEP).

Photo from the Department of Transportation

This includes construction in confined spaces, signal systems, subterranean tunnel excavation, and vehicles built as part of the project.

STEP refers to special assistance phrases used to increase the exposure of Japanese aid by transferring Japanese knowledge to developing countries.

“The main contract is Japan-tied, and subcontracting is general untied,” according to JICA.

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