Subways in Metro Manila soon

The Philippine economy best exemplifies the resiliency of all of us Filipinos in coping with the impact of the lingering coronavirus disease 2019 (COVID-19) pandemic. For the third quarter, the Philippine economy – as measured by the country’s gross domestic product (GDP) – grew by 7.1%. This was a complete reversal from the negative 11.4% contraction recorded in the third quarter last year at the height of the COVID-19 outbreak here in our country.

Sharing this piece of goods news yesterday, the Philippine Statistics Authority (PSA) reported their regular measurements on the total value of goods and services produced here in our country for this period under review. The third quarter GDP growth, however, was a little bit lower compared to the 12% posted in the second quarter of this year.

While our country’s economic performance is still far from returning to its pre-COVID-19 pandemic growth level, PSA chief Claire Dennis Mapa noted with optimism the positive indicators point to a sustainable recovery ahead. Obviously, the engines to the country’s economic activities were revved up by the return of workforces after quarantine restrictions have since then been relaxed.

The return of workforces naturally brought back the usual traffic gridlocks in Metro Manila despite lack of public utility vehicles. In fact, the vehicular traffic along EDSA is coming back to pre-pandemic, according to Metro Manila Development Authority (MMDA) Chairman Benhur Abalos.

Based on the MMDA monitoring, Abalos disclosed, the 23- kilometer per hour (kph) speed along EDSA during the quarantine period is slower at 11 kph during rush hours.

In a presentation during the House hearing last September, the Department of Transportation (DOTr) reported two massive railway projects are slated to have their trial runs by April next year under the Build, Build, Build Infrastructure program of the outgoing administration of President Duterte. These are, namely, the Metro Transit-7 project by the San Miguel Corp. (SMC), and the Metro Manila Subway project.

Once completed, the MRT-7 project aims to reduce travel time from Quezon City to Bulacan to just 35 minutes. Daily commute usually take hours due to traffic congestion and limited public transport options. The P357-billion Metro Manila subway project, which is being funded by the Japan International Cooperation Agency, will stretch across 36-kilometers, connecting Valenzuela Depot to NAIA Terminal 3 in Pasay City and Food Terminal Inc. in Taguig City. The project aims to reduce travel time from the Valenzuela Depot to NAIA Terminal 3 to just 45 minutes, from the original one hour and 30 minutes.

Makatizens woke up to a bit of good news also yesterday after the Fiscal Incentives Review Board (FIRB) of the Department of Finance (DoF) announced it has approved tax incentives for the rail operations of the P81-billion Makati Subway project. The grant of tax incentives to Makati’s underground train project gives it all systems go contrary to claims by some naysayers that it won’t push through.

Now it’s clear that the 8-kilometer intra-city subway is fully recognized and enjoys the Philippine government’s support.

Chaired by Finance Secretary Carlos Dominguez III, the FIRB approved the grant to Makati Subway of four years of income tax holiday, followed by five years of enhanced deductions and duty exemption on importation for the construction, operation, management, and maintenance of the rail project. In the approval of the project, the FIRB considered the projected increase in economic productivity of P24.4 billion per year once the Makati subway becomes operational in 2026. This will be monitored, along with other projected benefits, following the principle of granting incentives based on merit or performance embodied in the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, the DoF explained.

The finance chief clarified, however, that the incentive package is confined only to rail operations. “The incentives approved will not apply to the other business activities that would be generated from the subway operations, such as the lease of retail areas and advertising, which should be subject to the regular corporate income tax rate and other applicable taxes,” Dominguez pointed out.

Department of Trade and Industry (DTI) Secretary Ramon Lopez, who co-chairs the FIRB, concurred with the DOF. Lopez believes the productivity boost and other benefits from subway operations will more than offset the economic costs of foregone government revenues out of these tax-free perks for this capital-intensive project.

As a Public Private Partnership (PPP) enterprise, Mayor Abby Binay cited the subway project in the city of Makati seeks to provide safe and efficient mass transportation, ease traffic congestion, reduce greenhouse gas emissions, and create as much as 10,000 jobs during construction. It will connect key points in Makati like the current Central Business District near the Ayala Avenue-Gil Puyat, Jr. Ave. intersection, Makati City Hall, Poblacion Heritage Site, the University of Makati, Ospital ng Makati and the other new business districts within the city.

The Makati Subway project is being undertaken by Philippine Infradev Holdings, Inc. (Philippine Infradev) led by businessman Antonio Tiu. Though affected also by the COVID-19 pandemic, the project remains on track, Tiu reassured Mayor Binay and her Makati constituents. The $3.5 billion Makati Subway Project is touted as the biggest PPP project for a local government unit. The next challenge is for project proponents and the Makati City government to work with the DOTr on how to connect the proposed Makati subway to the national government’s Metro Manila Subway project.

Both subway projects would entail large-scale digging and removal of tons and tons of ground soils. Certainly, these projects would cause a lot of inconveniences and sacrifices once actual construction start. Rome was not built overnight, as one idiom goes, but Metro Manila will soon have subways.