The Philippines and Japan have signed two new loan agreements totaling P92 billion to continue the funding for the Metro Manila subway and start work on a project to connect Nueva Ecija and Nueva Vizcaya to the Cagayan Valley region.

The money for phase one of the subway is the third tranche of financing for the project and worth ¥150 billion, or roughly P55 billion. The agreement was signed by the Department of Finance and the Japan International Cooperation Agency, which has already supported the project with two previous loan agreements.

The first one was for ¥104.53 billion (P38.81 billion) and signed in March 2018, while the second one worth ¥253.31 (P94.05 billion) was inked in February 2022.

In total, building the first phase of the subway will cost P488.48 billion and give the Philippines its first underground mass transport system. Due to become operational in 2029, the subterranean railway will have 17 stations along 33km of track connecting Valenzuela City to Bicutan, with a branch line going to NAIA Terminal 3.

It will be able to carry 519,000 passengers per day, and cut the travel time from Valenzuela to the airport from 90 minutes to just 35 minutes. It should also have a noticeable effect on vehicular traffic levels above ground.

The second loan agreement that was signed last week was for the first tranche of financing for ¥100 billion, or around P37 billion. With a total project cost of P67.4 billion, the Dalton Pass East Alignment Road project ranks among the top infrastructure projects in Central and Northern Luzon, and will involve the building of a 23km road that bypasses the existing 77km Dalton Pass East Bypass Route.

Due to be completed in 2031, it will also include 10 bridges.

Japan is also chipping in for the second tranche of financing for this project, and is due to hand over another check for ¥39.19 billion (P14.58 billion) in 2027.

The loans that were signed under the JICA’s Special Terms for Economic Partnership program can be repaid in 40 years with a built-in grace period of 10 years, and carry interest rates of 0.3% per year for non-consulting services and 0.2% per year for consulting services.

Just in case you’re wondering, that’s a lot cheaper than the up to 3% China asked for infrastructure loans in the past.