The Philippines and Japan exchanged notes on Monday on the first subway project in Metro Manila, which could be considered as one step closer to implementing the project.

President Rodrigo Duterte and Japanese Prime Minister Shinzo Abe witnessed the exchange of notes between Foreign Affairs Secretary Alan Peter Cayetano and Japanese Ambassador to the Philippines Koji Haneda after their bilateral talks at the sidelines of the 31st Association of Southeast Asian Nations Summit and Related Summits in Pasay City.

After the exchange of notes, the loan agreement would be the next step to fully implement a project.

Japan will finance the 104.53 billion yen Metro Manila Subway Project (Phase 1) through a loan.

The subway project is expected to contribute to relieving serious traffic congestion in Metro Manila by seeking to meet growing transportation demand, as well as to ease atmospheric pollution and climate change.

It is a tied loan with interest rate of 0.1 percent per annum and payable in 28 years after the grace period of 12 years.

In the same event, the two countries also had the exchanges of notes on the 9.399 billion yen Arterial Road Bypass Project (Phase III) and on economic and social development program.

The program is a grant, which includes the provision of equipment for Marawi rehabilitation for the Department of Public Works and Highways and coast watch radars to increase the Philippine anti-terrorism capabilities in West Mindanao for the Philippine Coast Guard.

Tokyo and Manila also exchanged the loan agreement on 15.928 billion yen Cavite Industrial Area Flood Risk Management Project.

The two countries also agreed to sign the amended letter of arrangement on the transfer of Japan Maritime Self-Defense Force trainer aircraft TC-90s. Celerina Monte/DMS