Makati to review P8.96-B subway deal, warns of crippling financial impact

The new Makati City administration on Tuesday announced that a team will be formed to scrutinize the multi-billion peso subway settlement deal with Philippine Infradev Holdings Inc., aiming to safeguard public funds and prevent the city’s finances from being crippled.

In a press briefing, newly appointed City Legal Officer Atty. Eva Marie Ramel and Transition Team Head Atty. Christian Robert Lim outlined a timeline of events related to the P8.96-billion compromise settlement entered into by the outgoing administration of former Mayor Abby Binay-Campos.

Lim said Infradev filed a notice to terminate the joint venture agreement (JVA) in March 2025 and initiated arbitration proceedings the following month before the Singapore International Arbitration Centre (SIAC), in line with the dispute clause of the original 2019 agreement.

He noted that the previous administration finalized the settlement before Binay-Campos left office. The Makati City Council passed a resolution on 20 June authorizing the deal, which was signed on 23 June and submitted to SIAC for approval.

However, Lim said that then-Mayor-elect Nancy Binay’s transition team was not fully informed despite repeated requests for updates between May and June. He added that the full settlement agreement was only disclosed to the new mayor upon her assumption of office on 30 June.

Ramel argued the settlement — committing the city to pay Infradev $160 million (around P8.96 billion) — was financially unsustainable and potentially unlawful.

Makati’s approved budget for the remainder of 2025 is only P8.4 billion, already allocated to cover salaries, social services, and other obligations. “There is no available appropriation to cover the settlement amount,” Ramel said, citing a July 3 certification from the city’s budget department.

She further warned of punitive provisions in the agreement, including a 2.5 percent monthly interest on delayed payments beyond 90 days, and an additional $30 million (roughly P1.68 billion) in liquidated damages if Makati fails to pay within 120 days.

“These penalties could push the city’s liabilities under the deal to over P11.28 billion, far beyond what the city can afford,” Ramel said.

The agreement also included a warranty that funds had been properly allocated for the settlement, an assurance that the new administration wants to independently verify.