DFA, Japanese Embassy signs major infra projects accord

Minister and Deputy Chief of Mission of Embassy of Japan in the Philippines Matsuda Kenichi, and Department of Foreign Affairs (DFA) Secretary Enrique A. Manalo on 26 March 2024 signed the Exchange of Notes for the Dalton Pass East Alignment Road Project and the Metro Manila Subway Project (Phase I) which amounts to JPY100 billion and JPY150 billion respectively.

The signing of Exchange of Notes marks the way forward for the said major infrastructure projects.

The Dalton Pass East Alignment Road Project provides ODA loans to the Philippine government for the construction of a bypass road for the Dalton Pass, a major arterial road linking Metro Manila and north-central Luzon.

Revitalization of the economy

Construction of a disaster-resistant and highly motorable alternative road is expected to improve access and connectivity between north-central Luzon and Metro Manila and is seen to contribute to the revitalization of the Philippine economy.

Meanwhile, financing for the metro Manila subway — the first such project to be constructed in the country consisted of the first tranche totaling JPY104,530 signed on 13 November 2017, followed by the signing of the second tranche which came to JPY253,307 million on 27 July 2021.

The subway project is expected to contribute to sustainable economic growth through investment promotion in the Philippines, by meeting increasing traffic demand, reducing severe traffic congestion, and mitigating air pollution and climate change.

Financing terms and conditions

The Japan-tied loan amount for said two projects totals 250 billion yen, that is JPY 100 billion for the Dalton Pass East Alternative Road Construction Project (I), and JPY 150 billion for the Metro Manila Subway Project (Phase 1), with 0.3 percent interest rate per annum (and 0.2 percent for consultancy services) and a 40-year repayment period, including a 10-year grace period.