Exchange of Notes concerning Yen Loans to the Philippines
1. On November 7 (same day local time), Mr. Koji Haneda, Ambassador of Japan to the Republic of the Philippines, and H.E. Mr. Teodoro L. Locsin, Jr., Secretary of Foreign Affairs of the Republic of the Philippines, signed and exchanged notes concerning the provision of yen loan for the Metro Rail Transit Line 3 Rehabilitation Project (loan provision of up to 38.101 billion yen) in Manila.
2. Overview of the project
(Yen loan “Metro Rail Transit Line 3 Rehabilitation Project”, provision of loan of up to 38.101 billion yen)
Metro Rail Transit Line 3 (total length: 17 km, number of stations:13) which is one of the three elevated railways in Manila, runs over one of the most congested roads in the capital: EDSA(Circumferential Road 4). In the 12 years after its inauguration in 2000, the MRT 3 had provided safe and secured services under the maintenance and management provided by Japanese companies. However, since 2012, when non-Japanese companies assumed duty on the maintenance and management services of MRT3, these services have not been properly conducted, partly due to budget shortages. As a result the truck and rolling stocks have been deteriorated and consequently operation troubles frequently occur.
In light of this, under the request from the Government of the Philippines, the rehabilitation of MRT3 using Japanese technology aims to improve the safety and comfortability of the railway and hence promote the use of the line. In addition, this project will contribute to relieving traffic congestion and improving distribution system, and serve as countermeasures against air pollution and climate change. The project is also expected to contribute to enhancing the foundation for the sustainable economic growth of the Philippines through investment in quality infrastructure that utilizes Japanese knowledge, experience and technology.
This project is estimated to raise the capacity of MRT 3 from 0.81 billion passenger-kilometers (2017, actual value) to 1.4 billion passenger-kilometers (2022, estimated value), and increase the number of train operation from 142 times/day (2017, actual value) to 255 times/day (2022, estimated value).
3. Loan terms of the yen loan
(1) Rate of Interest: 0.1% per annum (0.01% per annum for consulting services)
(2) Repayment period: 28 years after the grace period of 12 years
(3) Procurement terms: Japan tied
[Reference] Japan-Philippines Relations (Basic Data)
The Republic of the Philippines covers an area of approximately 300,000 square kilometers (roughly 80% the size of Japan). It has a population of approximately 100.98 million (Philippines national census, 2015) and a gross national income (GNI) per capita of 3,580 U.S. dollars (World Bank, 2016).