MANILA, Philippines – The Philippines secured P92 billion worth of loans from Japan to fund the ongoing construction of the Metro Manila Subway and a road project that would connect Nueva Ecija and Nueva Vizcaya to the Cagayan Valley region.

The Philippine government, through the Department of Finance (DOF), and the Japan International Cooperation Agency (JICA) signed the loan agreement for the third tranche of financing for the Metro Manila Subway Project, worth 150 billion yen or around P55 billion.

The total cost for the country’s first underground mass transport system is P488.48 billion. JICA has supported the first two loan tranches, totaling P139 billion.

“Infrastructure investments have the highest multiplier effect on the economy.  As for every peso invested in new infrastructure, two pesos and thirty centavos are infused into the national economy,” said Finance Secretary Ralph Recto during the ceremonial signing of the loan agreements on Tuesday, March 26.

The subway is targeted to be operational by 2029. It is expected to reduce travel time from Valenzuela City to the Ninoy Aquino International Airport from 1 hour and 30 minutes to just 35 minutes.

It is seen to accommodate 519,000 passengers per day on full operations.

WATCH: What’s the progress on the Metro Manila Subway?

Philippine and Japanese officials also signed the loan agreement for the first tranche of financing for the Dalton Pass East Alignment Road Project worth 100 billion yen or around P37 billion.

The total project cost is P67.4 billion, which JICA also committed to fully fund with the second tranche of financing by 2027.

The road project is one of the biggest infrastructure projects in Central and Northern Luzon. It involves the construction of a 23-kilometer alternative road, bypassing the existing 77-kilometer Dalton Pass East Bypass Route. It also includes a 6.1-kilometer tube section and 10 bridges with a total length of 5.8 kilometers. 

Once the road is completed in 2031, Nueva Ecija and Nueva Vizcaya will be linked to Cagayan Valley.

The DOF said the loans, which are under JICA’s Special Terms for Economic Partnership program, carry an interest rate of 0.3% per annum for non-consulting services and 0.2% per annum for consulting services. They can be repaid in 40 years, inclusive of a 10-year grace period. – Rappler.com