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The Philippine government and Asian Development Bank signed three loan deals totalling US$1.074 billion to finance Davao City’s public transport system modernization
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The loan agreements were signed on July 1 , 2023 by Finance Secretary Benjamin Diokno and ADB country director Pavit Ramachandran in Davao City
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The loans will finance the Davao Public Transport Modernization Project, targeted to roll out initially by 2024 using electric buses that will carry around 800,000 passengers daily
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The project will be the Philippines’ first nationally determined contribution under the Paris Agreement on Climate Change, which sets a 75% carbon-free emission by 2030
The Philippine government and the Asian Development Bank (ADB) signed three loan agreements totalling more than US$1 billion for modernization of the Davao City public transport system, which the administration says will be a benchmark for public transport projects in other cities.
Finance Secretary Benjamin Diokno and ADB country director for the Philippines Pavit Ramachandran signed the loan agreements on July 1, 2023 in the Acacia Hotel in Davao City.
Witnessing the signing were President Ferdinand Marcos Jr., ADB President Masatsugu Asakawa, Vice President Sara Duterte, as well as other cabinet officials and local government executives.
The loans, worth a total of $1.074 billion, are meant to finance the Davao Public Transport Modernization Project (DPTMP) project, which is envisioned to roll out a modern, high-priority public transport system in Davao City initially by 2024.
The loans will come from the ADB and ADB-administered funds, specifically the Green Climate Fund (GCF) and the ASEAN Infrastructure Fund (AIF).
A US$50 million GCF component of the loan package will help finance the purchase of electric buses, which will represent the Philippines’ first nationally determined contribution under the Paris Agreement on Climate Change, which sets a 75% greenhouse gas emission reduction and avoidance target by 2030.
DPTMP will encompass 672 kilometers with 29 routes that connect key areas in Davao City to Panabo City, Davao del Norte. In all, 1,105 electric buses will operate on the routes carrying around 800,000 passengers daily.
“The administration of President Ferdinand Marcos, Jr. recognizes that modernizing our transportation systems will be critical in building a sustainable and globally competitive economy,” Diokno said in his message of commitment.
Diokno said the project will provide Davao City with an attractive, efficient, and affordable mode of transport that will maximize service coverage to cater to the growing travel demand and accelerate inclusive economic growth in the city.
Malacañang said separately that the DPTMP is one of the big infrastructure projects under the Build, Better, More program of the Marcos Administration that serves as the country’s first network solution addressing urban congestion and mobility challenges.
“It uses a holistic approach towards transport development and incorporates the country’s sustainability and climate action commitments that will serve as a benchmark for other cities’ public transit projects,” the Presidential Communications Office said in a statement.
Diokno said the modernization of the transportation system will also help enhance the ease of doing business in the country in the medium term.
“In the long term, a modern, efficient, and reliable transport system will improve the quality of life of our people and improve the connectivity of communities,” the finance secretary added.
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