The government has paid ₱295 million in commitment fees on foreign loans for transport projects that, in several cases, are years behind schedule or effectively shelved — money owed to lenders simply for keeping funds on standby, whether or not a single rail or bus lane got built. Senate President Sherwin Gatchalian raised the figure during a September 18 Senate finance subcommittee hearing on the Department of Transportation's proposed 2027 budget, and made clear he considers it a symptom of a borrowing habit Congress needs to rein in.
"Whether the project is on time or not, it is our obligation for making the loan available to us," Gatchalian said, describing how commitment fees work: lenders charge a standing fee on the undrawn portion of a loan, regardless of whether the borrower — in this case, the Philippine government — actually spends it on schedule.
Where the money went
The largest single item was roughly ₱91 million tied to the North-South Commuter Railway project, delayed about a year by unresolved right-of-way acquisition. The Davao Public Transport Modernization Project accounted for roughly ₱85 million in fees on a project now more than 56 months — over four years — behind its original timeline; as of a 2025 hearing, only 24 of 36 needed land parcels had been secured, up from zero initially. The Cebu Bus Rapid Transit Project, approved back in 2014, generated a combined ₱69 million in fees from two lenders; its first package is running, but Packages 2 and 3 remain stuck on incomplete right-of-way after local and provincial government interventions forced new studies. And the EDSA Greenways Project — a busway plan DOTr Secretary Giovanni Lopez has since shelved outright — racked up ₱49.2 million in fees over 45 months of delay before the department gave up on it.
The loans behind these fees came from the Asian Development Bank, Agence Française de Développement, and the International Bank for Reconstruction and Development — official development assistance, the kind of financing routinely pitched to the public as cheap because of its low interest rates. Gatchalian's point is that "concessional" doesn't mean free: every year a project sits idle, the fee meter keeps running on money the country has already agreed to owe.
The senator's warning
"A loan is a loan. I am not in favor of just because the loan is concessional, we will keep borrowing, especially since the debt has nowhere to go," Gatchalian told the subcommittee, urging DOTr to review its full slate of foreign-assisted projects, strip out components unlikely to move, and stop taking on new ODA commitments for initiatives that aren't fully ready to execute.
DOTr's response
Secretary Lopez told the panel the department has already begun reviewing which projects it can no longer justify pursuing — an implicit acknowledgment that at least some of the ₱295 million was spent servicing loans for projects DOTr itself now considers unworkable in their original form. He did not, as reported, commit to a specific list of projects to be dropped or a timeline for the review's completion.
What's still unknown
It remains unclear how much of the ₱295 million was tied to projects DOTr now plans to cancel outright versus projects still expected to eventually proceed, and whether the department's promised review will result in any loan renegotiation or early cancellation to stop further fees from accruing. Pulpulitiko could not independently confirm the hearing date's line-item totals beyond what was presented to the subcommittee.
Context
The hearing is part of hashing out the DOTr's 2027 budget request, coming as the House separately debates the broader ₱7.2-trillion 2027 national budget under Speaker Dy's pledge to "scrutinize every centavo." It also arrives against a backdrop of mounting scrutiny of infrastructure spending generally, following the flood-control kickback scandal that has already sent a former House Speaker to detention on plunder charges and pushed national government debt toward record levels.
