Japan Provides US$2.4 Billion Loan to Fund Manila Railways System

Philippines decaying rail system (Photo: Manila Bulletin)

Last Friday, Japan announced to provide US$2.4 billion into a new railway in the Philippines. The future infrastructure will alleviate Manila’s infamous traffic gridlock. Crowded commuter trains, long lines at stations, regular incidents of the ageing commuter trains are common events in Manila public transport system. President Duterte has even declined invitations to engagements in Manila, saying he wants to avoid worsening Manila’s horrendous traffic congestion.

The core of the future project is a 38-km elevated commuter line which would connect Manila to nearby Bulacan province to decongest the capital and help spur economic activity. “This is one of the biggest projects Japan has ever embarked upon using the yen loan,” Masato Ohtaka, deputy press secretary for Japan’s foreign ministry, told reporters in Manila. The project is part of a revival of Luzon Island rail system, which in the seventies used to span 900 km linking La Union province in Northern Luzon to Legazpy City in Albay province in the South. Railway was progressively abandoned to the development of roads. Over the last decade, the Philippines added only 5 km of new railtracks…

Japan also announced its interest to fund the construction of a rail system in Southern Mindanao, a project which also attracted China’s interest. However, sour relations between the Philippines and China over territorial claims in the South China Sea provide opportunities for Japan to build up business with its southern neighbour.

The railway was among the topics visiting Japanese Foreign Minister Fumio Kishida discussed with Duterte on Thursday in the southern city of Davao. The recently elected Filipino President has made infrastructure development and transport systems a priority of its new administration. Manila’s traffic problems is estimated to cost the Philippines an estimated $64 million a day in 2015, according to a Japanese study.

According to AFP news agency, the Japanese loan is for the Philippine transportation department, payable over 40 years, though Ohtaka did not give a timeline for the project. Japan is already the largest trading partner of the country.