Flood-control loans face restructuring

The Philippine government is set to cancel part of its loans from the World Bank and the Asian Infrastructure Investment Bank (AIIB) for the long-delayed Metro Manila flood control project and overhaul its implementation plan, as slow disbursement and construction setbacks raise doubts about completing critical infrastructure on time.

- BY BEN ARNOLD DE VERA

In an aide memoire seen by Manila Bulletin, the Washington-based World Bank said Philippine authorities agreed to restructure the Metro Manila Flood Management Project, including changes in scope and the cancellation of $2 million-$1 million each from the World Bank and the AIIB-in loan proceeds following persistent implementation bottlenecks.

"Details of the project restructuring were defined based on an agreement reached between MMDA [Metropolitan Manila Development Authority] and DEPDev [the Department of Economy, Planning, and Development] in a meeting on Dec. 15 [of last year]. The project changes, in effect, scope changes and cancellation of $2-million loan proceeds, will be documented through a notification to the DEPDev-ICC [Investment Coordination Committee]," the World Bank said in the aide memoire documenting the implementation support mission held from Nov. 3 to Dec. 1, 2025.

MMDA and the Department of Public Works and Highways (DPWH) were expected to formally submit the restructuring notification to the ICC by end-January this year, with review and approval taking up to two months.

The move comes as the $500-million flood mitigation initiative struggles with slow fund utilization and delayed construction, even as the November 2026 loan closing deadline approaches.

Based on the latest implementation status and results report published last January, $116.26 million, or 62.86 percent, of the reduced $184.94-million World Bank loan for the project has been disbursed, leaving $68.68 million to be spent before the financing closes on Nov. 30 this year.