Philippines seeks earlier rail groundwork to curb unused-loan fees
Lenders had billed the government up to ₱1.76 billion in commitment fees as of July, with right-of-way delays holding up the use of railway loans.
Acting Transportation Secretary Giovanni Lopez has ordered railway officials to complete preparatory work, particularly right-of-way requirements, before seeking loans, as the Philippines looks to limit charges on financing it has not used.
Figures provided to The Philippine Star put lenders’ commitment-fee bill at up to ₱1.76 billion as of July. These charges apply to unused loan amounts. Lopez said difficulties securing right-of-way have prevented the Department of Transportation (DOTr) from drawing on railway financing, allowing fees to accumulate each year.
The department intends to apply the approach first to Metro Rail Transit Line 4 (MRT-4), a proposed 12.7-kilometre connection between Ortigas and Taytay, Rizal. It wants preparatory requirements settled before signing a financing agreement with the Asian Development Bank (ADB).
ADB will lend US$1 billion for the railway, paired with US$650 million from the Asian Infrastructure Investment Bank. ADB’s latest project data sheet moves the loan approval timeline to March 2030. Lopez said this gives officials longer to finish engineering design and acquire sites.
Lopez said the department wants to avoid increasing borrowing for now and concentrate on finishing the North-South Commuter Railway and Metro Manila Subway Project. Delays mean both would be completed only in the early 2030s.
Initial MRT-4 plans include 10 stations serving Quezon City, Pasig, Cainta and Taytay. The line is expected to shorten the Taytay–Ortigas trip from three hours to 30 minutes. Meanwhile, DOTr plans a dedicated Ortigas bus lane extending to Aurora Boulevard, covering 30.5 kilometres with 65 stops. Its design remains under assessment, Lopez said.
