The Market Monitor Minding the Nation's Business
By Rose de la Cruz
By 2030, the Philippine railway system would have expanded threefold in length and nearly fivefold in train ridership with the completion of investment-approved projects, optimistically projected by the Department of Transportation.
But this would all depend on how fast funding is raised and the extent of private participation in such infrastructure projects as the country’s debts have already ballooned beyond imagination.
During the Philippine Railway Conference (PhilRailCon) 2024, DOTr Assistant Secretary for Railways Jorjette Aquino said that the existing railway network, now at 270.16 kilometers, is expected to grow by 356.43 percent to reach 1,233 kilometers. This expansion includes major initiatives such as the North-South Commuter Railway (NSCR) and the Metro Manila Subway.
Aquino said that these developments are projected to boost daily train ridership by 486.29 percent, increasing from 938,318 passengers to an estimated 4,860,196. The number of railway stations is expected to rise from 85 to 216, while the fleet of train cars will expand from 290 to 1,391.
DOTr Undersecretary Timothy John Batan noted that funding for railway projects has surged since the previous administration, reaching P616.26 billion in 2024.
The agency’s railway budget has grown from P57.98 billion in 2021 to P102.47 billion in 2022, and significantly to P419.82 billion in 2023.
Batan attributed this funding boost to partnerships with international entities, including the Japan International Cooperation Agency (JICA) and the Asian Development Bank, along with support from foreign governments such as Japan, China, South Korea, and Australia.
He emphasized the significance of events like PhilRailCon for market engagement, enabling the DOTr to inform the private sector about upcoming infrastructure projects and assist in project planning.
The JAPAN International Cooperation Agency (JICA) for one is keen on providing more funding support for road and railway projects in the Philippines.
“We are very keen and enthusiastic not just to maintain but to expand our cooperation with the Philippines as a most reliable partner,” JICA Chief Representative in the Philippines Takema Sakamoto told reporters on the sidelines of a forum on Tuesday.
“In the SONA (State of the Nation Address), President Ferdinand R. Marcos, Jr. mentioned several project names we are involved in,” Sakamoto said, citing the Plaridel Bypass Road, the Metro Manila Subway, and the North-South Commuter Railway (NSCR), Business World reported in July 2024.
The Department of Finance and JICA have already signed loan deals for those projects. However, the huge funding requirements of these projects may require “further financial intervention” from JICA, he added.
While JICA has yet to finalize how much in total loans would be approved this year, Mr. Sakamoto said he hopes it would be higher than the ¥300 billion to ¥400 billion (around P115 billion to P153 billion) approved last year.
“I would like to convince Tokyo to mobilize more money. Of course, it depends on the decision of the government of Japan and taxpayers or the Japanese congressmen. So, I cannot say an exact figure or specific output now,” Sakamoto said.
In March, the Department of Finance (DoF) and JICA signed the third tranche of the loan agreement worth ¥150 billion (around P57 billion) for the first phase of the Metro Manila Subway Project.
Both sides also inked a ¥100-billion loan agreement that covers the first tranche for the Dalton Pass East Alignment Road Project that will connect San Jose City, Nueva Ecija to Aritao, Nueva Vizcaya.
JICA has also extended P4.25 billion in funding for the Plaridel Bypass Project-Phase 3, which traverses Balagtas, Guiguinto, Plaridel, Bustos and San Rafael in Bulacan.
The P873-billion NSCR is being co-financed by JICA and the Asian Development Bank. The 147-kilometer NSCR will connect Malolos, Bulacan with Clark International Airport, and Tutuban, Manila with Calamba, Laguna. It will have 35 stations and three depots.
Mr. Sakamoto also emphasized the need to address the persistent traffic congestion in the capital region. An earlier study by the JICA showed traffic congestion costs the Philippine economy P3.5 billion a day.
“We need to make (roads) more modernized, in collaboration with a modernized railway system, it’s a combination. For example, feeder transportation should be developed further,” he said.
Sakamoto said the condition of roads in Metro Manila is “another very important challenge” that should be tackled. He wants to consult with the Departments of Transportation, Public Works and Highways, and the Metro Manila Development Authority (MMDA) on this matter.
JICA is also exploring a new technical cooperation with the MMDA that will modernize the latter’s intelligent transport system, Sakamoto said.
Last week, JICA and DoTr inked a three-year technical cooperation project that aims to improve the services of public utility vehicles and help decongest Metro Manila.
The Philippines heavily relies on official development assistance (ODA) to fund key projects amid limited fiscal space.
Japan was the country’s second-largest source of ODA in 2022, accounting for 30.75% or $9.96 billion of the total, latest data from National Economic and Development Authority showed.