Department of Transportation (DoTr) Secretary Giovanni Lopez admitted Wednesday that the government’s current budget allocation for two multi-billion-peso railway projects is insufficient to cover their requirements for the year.
Lopez said the 2026 General Appropriations Act allocated P44.17 billion for the North-South Commuter Railway and the Metro Manila Subway Project.
He cited that the amount falls short of the total funding needed to keep both massive infrastructure developments on track through the end of 2026.
To bridge the gap, the government is exploring additional funding sources, including official loan proceeds and potential excess state revenues, to cover payments for ongoing infrastructure contracts.
The funding bottleneck follows complaints from Italian-Thai Development Public Company Limited, the main contractor for a critical segment of the North-South railway.
An official from the company stated that the government has left around P1.2 billion in obligations unpaid for nearly eight months, severely delaying construction.
The package handled by the contractor covers a 12-kilometer railway segment running from Sindalan in San Fernando, Pampanga, to Clark in Mabalacat City.
Funded through a P25-billion loan from the Asian Development Bank, the contract includes the construction of one major station and four substations.
The segment was originally scheduled for completion within 48 months, with an allowed extension of up to 35 months. However, project inspection reports show the segment is currently only about 30 percent complete.
Lopez also pointed to unresolved right-of-way issues as a primary catalyst for the delays, stating that land acquisition should have been fully settled before civil works commenced.