PH to scrap $85M unused WB fund for Cebu BRT

The Philippine government has asked the World Bank (WB) to cancel about $85 million in financing for the long-delayed Cebu bus rapid transit (BRT) project, seeking to curb mounting commitment fees.

This is as the lender considers longer disbursement timeline for the remaining resources, while the government moves to limit future fees on undrawn balances.

In a restructuring paper, the WB said it had received a request from the Department of Finance dated Jan. 22 to scrap $59.9 million of the $116-million loan for the project. This is alongside cancellation of the entire $25 million Clean Technology Fund allocation.

The amount represents proceeds unlikely to be used before the September 2026 closing date of the project, reflecting slow implementation of remaining works.

Governments typically incur commitment fees on portions of loans that remain undisbursed under agreed schedules.

The move leaves the Cebu BRT project with $56.1 million in funding, which is proposed to be reallocated across components to address delays and align the project scope with the reduced financing.

Full disbursement of the remaining funds is now projected by Jan. 31, 2027.

This marks the fifth round of restructuring for the project since its approval in September 2014.

So far, only $40.62 million, or about 35 percent of the $116 million loan, has been disbursed, while the entire $25 million Clean Technology Fund grant remains unspent.

Cebu BRT is a bus service with dedicated routes or priority lanes traversing a 13.8-kilometer corridor from South Road Properties through Mambaling up to IT Park.

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The public transportation system—designed to have 17 bus stations, two terminals and one depot—has a 160,000 passenger capacity once fully operational.

But the World Bank has rated the implementation “unsatisfactory,” citing slow disbursements.

Only one section of the corridor has been substantially completed, while key components—including traffic management, the creation of a management entity and the selection of an operator—have yet to begin.

“At the current level of implementation, a substantial portion of the remaining project resources will not be utilized by closing,” the WB explained.