Makati expected to gain full control of subway project

Makati City is expected to assume full control of the multibillion-dollar Makati Subway Project following the anticipated conclusion of arbitration proceedings at the Singapore International Arbitration Centre (SIAC), according to former Mayor Abby Binay-Campos.

In a statement issued Sunday, Binay-Campos said the resolution of the arbitration case, which began in April 2025, would likely award Makati ownership of Makati City Subway Inc. (MCSI), the company developing the underground rail system.

“It’s a win for Makati,” she said, describing the potential ruling as a step toward ending years of legal uncertainty and enabling the city to move forward with the project independently.

Under the expected outcome, Makati would acquire MCSI — which carries an estimated net value of $1.6 billion — in exchange for a compensation payment of $160 million to its original public-private partner. That amount reflects the approximate investment made in the project as assessed by auditing firm PricewaterhouseCoopers.

Further details of the settlement are expected to be outlined in the final Award to be released by the SIAC Tribunal and disclosed to relevant regulatory bodies.

Binay-Campos also emphasized that the acquisition would not disrupt ongoing city programs or strain Makati’s finances. She noted that the city has realized cost savings following the transfer of 10 barangays to Taguig, which previously required P7.9 billion in subsidies.

The city’s assets stood at P243.44 billion in 2023, up from P239.48 billion the year prior, based on the Commission on Audit’s Annual Financial Report on Local Governments.

The Makati Subway Project was initiated in 2019 through a Joint Venture Agreement with Philippine Infradev Holdings Inc. However, the venture stalled due to the COVID-19 pandemic and a 2021 Supreme Court ruling that transferred jurisdiction over portions of the project area to Taguig.

InfraDev later filed for arbitration, claiming Makati defaulted on the JVA following the court decision. The company sought $1.7 billion in damages, citing the jurisdictional change as a “Change of Law.” Makati, however, argued that the event qualified as “force majeure,” exempting it from liability under the contract.

The anticipated arbitration ruling is seen as pivotal for the future of the Makati Subway, which could now proceed under government-led procurement or new public-private partnership arrangements. Binay-Campos cautioned that any effort to reverse the arbitration outcome could expose the city to further legal and financial risks.