A spring in problem solving

In 2017, the Japanese government, through its development arm Japan International Cooperation Agency (JICA) warned of P3.5 billion worth of economic opportunities from the daily road jams.

JICA Philippines chief representative Susumu Ito then warned that with the growing population in the capital city, the cost of vehicular traffic congestion was rising.

He added that suburban growth will add to the impossible situation in Metro Manila’s roads.

“Metro Manila’s population in 2015 is almost 13 million people; Bulacan, Rizal, Laguna and Cavite [combined], almost 11 million. Mega Manila in 2015 has 24 million people. But in 2025, Metro Manila’s population would reach 16 million, and Mega Manila including Bulacan, Laguna, Rizal and Cavite will grow to 38 million. So Mega Manila will be larger. It will become one of the largest cities in the world,” Ito said.

Japan did not stop after the release of the JICA study as it soon became a partner as it provided the much-needed financing for flagship infrastructure under “Build, Build, Build” which was later revised to the “Build, Better, More” project.

The buildup totaled more than P8 trillion on hard and modern infrastructure during the term of President Rodrigo Duterte, thus ushering in “the golden age of infrastructure.”

Japan believed that the focus on infrastructure was the right step forward for the Philippines to maintain strong economic growth.

“The conclusion that we have is that ‘Build, Build, Build’ is the right direction. It’s a must-do,” Ito said.

JICA said the initial phase of the P88.5-billion Metro Manila Subway Project is an initiative that can ease traffic congestion in the metropolis. Thereafter, the Japanese government provided nearly P100 billion in loans for the project.

Japan, also through JICA, then unveiled massive financing for the public transport projects including nearly P100 billion for the Metro Manila Subway project which is considered among the key solution to the daily carmaggedons in the city.

It drafted a “dream plan” for improving travel in Metro Manila that consisted of short and long-term developments that is estimated to cost an overall P2.3 trillion.

Wasted productivity, experts said, represented lost opportunities in terms of earning extra income or spending more time with the family for a worker, while translating to missed output for the economy.

The social cost is also tremendous as instead of being at the office to start work, a worker is stuck in traffic.

Instead of being at home to take care of the children, a parent spends his time stuck on the roads.

More cars on the road also mean a rise in greenhouse gas emissions, which in turn could lead to health costs.

JICA reported that greenhouse gas emissions are expected to increase to 5.72 million tons a year in 2030, compared to 4.7 million tons a year in 2012.

Thus, investing in the improvement of mass transit in the country offers benefits that cut across livelihood but also address its deep social impact. 

JICA’s study showed the demand for mass transit in Mega Manila would continue to grow reaching 7.4 million passengers a day by 2030.

Public transport accounts for 69 percent of the total number of trips taken in Metro Manila every day. Currently, buses and jeepneys take share in the mode of public transportation, accounting for 71 percent of trips.

In its proposed dream plan for 2030, the Japanese agency stressed the need for an integrated urban mass-transit network, with an efficient railway system making up a large part of the public transport mix.

JICA said railways should ideally take up a 41 percent share of the overall transport system, with jeeps and buses at 33 percent and cars at 26 percent.

Improving mass transit systems are “low-hanging fruits” that will be cost-effective and able to serve millions of commuters.

From dream to reality

Other feature of the JICA dream plan includes the building of new roads and expressways, improving accessibility to rail systems, modernizing of bus and jeepney fleets, and improving traffic enforcement and education.

JICA said the Philippines traffic program aims to cut traffic losses, earn revenues, and reduce pollution from greenhouse gas emissions.

The Philippines can save as much as P1.2 trillion in 2030: P1.9 billion a day or P570 billion a year from time cost savings and P2.1 billion a day or P630 billion a year from vehicle operating cost savings.

In addition to the savings, the government can also collect up to P119 billion a year in toll and fare revenue.

Meanwhile, commuters can expect to save P18 a day and cut their travel time by 49 minutes per trip.

The Department of Finance (DoF) said $1.5 billion worth of pipeline projects with the Japan International Cooperation Agency (JICA) will be rolled out from 2024 to 2025.

The DoF and JICA are also working toward executing four major loan agreements within the year.

JICA’s bigger involvement in the development thrust was discussed during a meeting between DoF Undersecretary for the International Finance Group (IFG) Joven Balbosa and JICA’s director general of Southeast-Asia and Pacific Department Hayakawa Yuho recently at the JICA Office in Washington, D.C.

 During the meeting, the DoF and JICA discussed the timeline and preparations required to facilitate the signing of the loan agreements for projects on maritime safety, roads and flood risk management, which are targeted before the end of the year.

Wider JICA involvement

After being part of the solution in solving the traffic problem, JICA expressed its plan to expand funding into other sectors that are in line with the Marcos administration’s development objectives, such as agriculture, education and health.

JICA also expressed its openness to scale up its policy-based lending, with an intent to co-finance the Climate Change Action Program (CCAP) Subprogram 2 with the Asian Development Bank and Agence Française de Développement.

The CCAP will support the Philippines in implementing its national climate policies, including its Nationally Determined Contribution.

The program will intensify efforts to transform key sectors toward a climate-resilient and low-carbon economy.

The DoF also sought JICA’s assistance in bringing in more private sector financing to support the administration’s development goals as the Philippines transitions to an upper-middle income country status.

Last year, Japan was the country’s largest official development assistance (ODA) partner with total loans and grants amounting to $12.3 billion.

The amount accounted for about 32.82 percent of the total ODA to the country as of December 2023.

The Japanese government renewed its support to the country’s big-ticket road transport projects through a new accord signed with the Department of Transportation (DoTr).

The agreement between JICA and DoTr, was meant to enhance the quality and efficiency of the country’s road transport systems, was signed between the Japan International Cooperation Agency (JICA) and the DoTr in Makati City.

During the signing ceremony, Transportation Secretary Jaime Bautista said the three-year technical cooperation project (TCP) agreement would grant the DOTr capacity development initiatives to support road-based public transport systems through route planning, improvement of intermodal facilities, and service level monitoring.

“This project is not just a plan written on paper — it represents the culmination of a series of technical discussions and collaborative efforts between DOTr and JICA,” Bautista said.

He added that the agreement would boost the capacity of road-based public transport and improve inter-modality of these transport systems.

“Our focus with this cooperation project is clear, to improve road transport systems in Metro Manila and surrounding regions,” he said.

The agreement will boost road projects such as the Public Transport Modernization Program (PTMP), EDSA Busway, Active Transport Program, and the EDSA Greenways Project.

Aside from improving road projects, he said technical cooperation will also serve as an important reference for future public road transport projects that would support the country’s growing number of commuters.

JICA Chief Representative Sakamoto Takema expressed confidence that the project will achieve its objectives fully within three years.

“We are transforming public transportation in the Philippines. Let's create a history,” Sakamoto said.

“JICA has also provided technical and financing support to the rehabilitation of 14 bridges for the structures to withstand the impact of a strong earthquake," he said.

The bridges were identified in consideration for their old age, the current condition of their structural integrity, and carrying capacity versus the increasing volume of vehicles.

 First subway underway

Finance Secretary Ralph Recto added the third tranche of the loan agreement with JICA for the Metro Manila Subway was secured last March.

The 33-kilometer Metro Manila Subway is currently being supported by two active loan agreements from JICA.

The first tranche worth P38.8 billion was signed on 16 March 2018 while the second tranche worth P94.1 billion was signed on 10 February 2022.

The project is expected to enter into a third tranche agreement with a loan amount of P55.7 billion by March 2024.

The fourth and fifth tranches worth a combined P151.1 billion are still under discussion.

Recto said that once completed by 2029, the 17-station subway line will cut the travel time from Valenzuela to Ninoy Aquino International Airport from the current one hour and 30 minutes to only 35 minutes.

The project is expected to benefit 500,000 commuters every day.

The subway will start from Valenzuela, pass through Quezon City, Pasig City, Makati City, and Ninoy Aquino International Airport and Bicutan.

"In addition to sparing our people from the burdens of commuting, the subway will also spur more businesses and create more job opportunities. The construction of the massive project has already generated 5,469 jobs for both skilled and unskilled workers providing a vital boost to our labor market," Recto said.

He said more than 5,500 workers will benefit from employment opportunities once the subway fully operates in 2029.

"The Metro Manila Subway’s direct economic benefits will allow us to save about 2.5 billion pesos daily or 930.26 billion pesos annually through reduced vehicle costs, travel time, and carbon emissions. The subway system alone will significantly mitigate economic losses caused by traffic congestion in the metro," Recto said.

 DoTr expects to award all contract packages for the Metro Manila Subway by the third quarter.

"There are still three packages that we are initiating with, that we are procuring. And we're hoping to do the procurement or to award it by third quarter of this year," according to DoTr chief Bautista.