THE PHILIPPINE government and the Japan International Cooperation Agency (JICA) inked on Friday, March 16, the first tranche of the loan agreement for the 25-kilometer Metro Manila subway.

The loan amounts to 104.53 billion yen, or $935 million, and carries a 0.1% interest rate per annum for non-consulting services and a 0.01% per annum for consulting services inclusive of a 40-year concession period and a 12-year grace period.

“As the Philippines’ trusted partner in development for many years, JICA offers our support to the construction of the subway project so the Philippines can sustain its growth trajectory, and improve the quality of life of many Filipinos through seamless mobility and connectivity,” newly appointed JICA Chief Representative Yoshio Wada said in a statement.

The subway project is one of the government’s solutions to mitigate Manila’s road congestion, which is estimated by Japan’s aid agency to cost the economy P3.5 billion daily.