The Japan International Cooperation Agency (JICA) has entered an agreement with the Philippine Government to provide an official development assistance (ODA) loan of up to JPY104.53bn ($985m) for the first phase of the Metro Manila Subway project.

According to the deal, the loan will have an annual interest of 0.10%, which needs to be repaid in 40 years with a grace period of 12 years.

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The loan will be used to construct stations, underground tunnels between stations, depots and other public works, as well as procure rail systems and rolling stocks.

It will also contribute towards consulting services such as tender assistance, construction supervision and Transit Oriented Development support.

“The loan will be used to construct stations, underground tunnels between stations, depots and other public works, as well as procure rail systems and rolling stocks.”

Development of the project will further see the use of Special Terms for Economic Partnership (STEP), which refers to special assistance terms for promoting the visibility of Japanese aid by transferring Japanese technology and expertise to developing nations.

The Metro Manila Subway is to be developed by the Philippines Department of Transportation and will feature 13 underground stations measuring approximately 25km long. It represents the first subway in the Philippines to connect Quezon City with Parañaque.

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Upon completion, the project is expected to accommodate growing transportation needs and ease traffic congestion in Metro Manila, one of the three metropolitan areas in the Philippines. The population of the area has rapidly increased from 7.92 million people in 1990 to 12.87 million in 2015, yet is currently only served by three rail lines covering 50km.

Completion of the project is expected in September 2025, once all the facilities are put into service.