The Philippines and the Asian Development Bank have signed the first tranche of the multilateral institution’s US$4.3-billion (approximately P223.6 billion) funding support for the South Commuter Railway Project, one of the Duterte administration’s big-ticket infrastructure projects under the “Build, Build, Build” program.
The Department of Finance said in a statement Friday it was ADB’s largest single infrastructure loan package to date. President Rodrigo Duterte witnessed the signing of the agreement by Finance Secretary Carlos Dominguez III and ADB president Masatsugu Asakawa on the first tranche of the loan amounting to US$1.75 billion in ceremonies held at Malacañan Palace Thursday night (June 16).
Dominguez said ADB’s high level of approved financing to the Philippines—totaling over US$30 billion since 1969 and of which more than half was released under the Duterte administration—was “a vote of confidence for President Duterte’s economic development agenda and fiscal management.”
Other ADB-supported projects in the country have attracted total of US$8.7 billion in co-financing from several partner institutions, or about 74 percent of the total sovereign co-funding from 1972 to 2022.
The Japan International Cooperation Agency, which has extended US$4.5 billion to ADB’s projects in the Philippines since 2017, has been the largest of these co-financing partners.
Under the Duterte administration, the Philippines-ADB portfolio has also been rebalanced to closely align with the priorities set by the Philippine government, such as the “Build, Build, Build” program and the ambitious climate action agenda, which led the bank to extend its first-ever climate change policy-based loan to the country.
ADB has provided technical assistance to the government for the design of several projects.
ADB will extend the US$4.3-billion financing package for the South Commuter Railway Project, which has a total estimated project cost of US$8.07 billion, through a multi-tranche facility.
JICA is co-financing the project through a US$1.67-billion loan, with the Philippine government covering the rest of the balance of the cost.
Another US$1.75-billion loan is expected to be provided by the ADB in 2024, representing the second tranche of the financing package.
The final tranche of US$800 million to project is scheduled to be given in 2026.
The railway project is expected to bring much-needed relief to thousands of Filipinos traveling between Manila and Calamba along with several nearby towns in Laguna, as it will reduce travel time between the two points from about two hours by bus to less than an hour by rail.
The project is expected to contribute to the Philippines’ climate action agenda through the reduction of greenhouse gas emissions once the project is complete.
The 54.6-kilometer project is part of the larger 163-km North-South Commuter Railway system, which is expected to create over 35,500 jobs during the construction stage and about 3,000 permanent jobs during its operation.
With 18 stations, the railway project will improve connectivity in the public transport network by linking with all rail-based public transport lines in Metro Manila. It includes a connecting line to the planned Metro Manila Subway, which will improve connectivity by operation of direct trains for passengers traveling from Calamba to Bonifacio Global City, Ortigas, and Quezon City along the Metro Manila Subway.
On top of infrastructure and climate change-related financing, the ADB has been one of the Philippines’ reliable partners in accessing support for its COVID-19 response.