Makati subway deal derails

By Tracy Cabrera

The controversial P8.96-billion settlement for the scrapped Makati Subway Project is under fire after the city’s new administration revealed it was approved without actual funding in the 2025 budget, casting serious doubt on the deal’s legality and financial viability.

Makati Mayor Maria Lourdes “Nancy” Binay-Angeles on Thursday raised alarm over the multi-billion peso agreement with Philippine Infradev Holdings Inc. (InfraDev), which was quietly signed just days before the former city leadership stepped down.

Based on official records, the previous city council passed Resolution 2025-031 on June 20, authorizing the settlement, with the formal signing taking place on June 23. The agreement compels the city to pay InfraDev US$160 million (roughly P8.96 billion) within 90 days of receiving a consent award from the Singapore International Arbitration Centre (SIAC).

“This agreement places the financial health of the city at serious risk,” Mayor Binay warned, citing the absence of due diligence in evaluating the city’s ability to shoulder such a massive obligation.

The deal stemmed from an international arbitration case filed by InfraDev after the 2021 Supreme Court ruling that transferred several barangays—and a significant portion of the subway’s planned route—from Makati to Taguig. This jurisdictional shift effectively halted what was once a flagship infrastructure project.

While the settlement would give Makati ownership of partially completed subway assets and all of Makati City Subway Inc.’s shares, it also obliges the city to return over 722 million preferred shares in InfraDev.

However, a July 3 certification from the City Budget Department confirmed that the 2025 budget contains no allocation for the settlement. This puts the city in a precarious position, as Mayor Binay warned that honoring the deal could severely impact essential services and ongoing city programs.

As scrutiny mounts, the controversial deal is likely headed for a legal and political showdown, raising questions about fiscal responsibility and governance in the transition of power.