The Philippines and Japan signed on Tuesday two loan agreements worth a combined P75.5 billion (about 154 billion yen) for two big-ticket projects in Visayas and Mindanao under the “Build, Build, Build” infrastructure program as the Duterte administration ramps up infrastructure investments to help the country recover quickly from the coronavirus-induced global economic crisis.
Finance Secretary Carlos Dominguez III and Japan International Cooperation Agency chief representative Eigo Azukizawa signed the agreements for the P57-billion (119 billion yen) loan to support the construction of the Cebu-Mactan Fourth Bridge and the Coastal Road Construction project in the Visayas and the supplemental financing of P18.5 billion (35 billion yen) for the Davao City Bypass Construction Project.
“Given the challenging circumstances, these projects bring more support to our economic recovery well beyond their nominal value,” Dominguez said after the signing of the loan agreements at the Department of Finance office in Manila.
The approval of the two loans was fast-tracked through high-level consultations between the Philippines and Japan.
Azukizawa said the loan agreements were signed even amid the global crisis triggered by the coronavirus disease 2019 pandemic.
“In a broader sense, I hope that these projects will also contribute to the economic recovery of the country amidst the COVID-19 pandemic as we fully support your government’s pronouncement that restarting and accelerating the ‘Build, Build, Build’ program should be one of many strategies for reviving the Philippine economy,” Azukizawa said.
The signing was witnessed by Japanese Ambassador to the Philippines Koji Haneda and Public Works Secretary Mark Villar.
The loans for these projects carry highly concessional lending terms of 0.10 percent (a tenth of 1 percent) interest rate per year for non-consulting services and 0.01 percent (a hundredth of a percent) for consulting services, with a maturity period of 40 years inclusive of a 12-year grace period.
The Cebu-Mactan Fourth Bridge and the Coastal Road Construction project is the biggest infrastructure project in the Visayas under the “Build, Build, Build” program with a total estimated cost of P76.4 billion (about $1.59 billion or 168.96 billion yen).
JICA committed to fund 75 percent of the total cost of the project through official development assistance financing, while the remaining 25 percent or P18.82 billion (about US$442.76 million or JPY49.73 billion) will be covered by local financing.
The project aims to improve the capacity of the existing road network connecting mainland Cebu and Mactan Island, to facilitate the faster movement of trade and people between the two areas.
It involves the construction of a 3.3-kilometer bridge with an elevated viaduct of 3.38 kilometers (4-lane road, with two lanes in each direction); and a 4.9-km four-lane coastal road with an elevated viaduct of 4.75 km.
The bridge component will be built using the steel box girder-with-orthotropic steel deck method, known for being the most innovative and shortest period of bridge construction. This will also allow the future expansion of the four-lane bridge to six lanes.
On top of the loan, JICA will also finance the detailed engineering design for the project, which is expected to start groundwork in 2021 and be completed in 2029.
The Davao City Bypass Construction project, meanwhile, is expected to reduce congestion in Davao City and improve accessibility to its major development hubs through the construction of a 45.5-km, four-lane bypass road.
It also includes a 2.3-km main tunnel, which will utilize advanced Japanese technologies for its construction, and 0.5-km 4-lane cut-and-cover tunnel section running through the mountainous terrain in Barangay Magtuod, Davao City.
Stretching from the Davao-Digos intersection of the Pan Philippine Highway at Toril, Davao City to the Davao-Agusan National Highway in Panabo City, the project is expected to reduce travel time between the two points from the current one hour and 44 minutes—using the existing Maharlika Highway—to only 49 minutes.
It will start construction this year and is expected to be operational by 2023.
The DoF said P18.5-billion loan agreement signed Tuesday for the project is supplemental to the loan accord worth P9.27 billion (23.9 billion yen) signed in 2015.