WB, AIIB fund Metro Manila flood control projects

Despite delays, the Metro Manila flood control project being funded by loans from the Washington-based World Bank Group (WBG) and the China-led Asian Infrastructure Investment Bank (AIIB) has so far benefitted over half a million residents in flood-prone areas, according to a report by Manila Bulletin.

“To date, more than 600,000 people have benefitted from the rehabilitated pumping stations, and 400 families have been successfully resettled” under the first phase of the Metro Manila Flood Management Project, according to the Water Security Financing Report 2024, published on June 26.

The report was jointly published by the WBG, the Manila-based Asian Development Bank (ADB), the African Development Bank Group (AfDB), the AIIB, the Council of Europe Development Bank (CEB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank (IDB), the Islamic Development Bank (IsDB), and the New Development Bank (NDB). These 10 multilateral development banks (MDBs) had earlier committed to a joint action to improve global water security by 2030, noted the maiden annual report which monitors this commitment.

According to the report, the WBG-AIIB partnership for the Metro Manila Flood Management Project “has achieved significant success, ensuring safe, sustainable housing and livelihood support for displaced families.”

To recall, the Philippines in 2017 borrowed a combined $415.2 million from the WBG and the AIIB to bankroll the bulk of the costs for this project, which is intended to protect 1.1 million Filipinos living near 56 “potentially critical” drainage systems across 11,110 hectares (ha) of flood-prone areas in the National Capital Region (NCR).

Through the national budget, the government would shell out the remaining $84.8 million for this $500-million flood control project.

“Cofinancing allowed the government to expand the project scope, with AIIB funds complementing the WBG loan, enabling full rehabilitation of pumping stations. AIIB and WBG teams have also worked together to strengthen project management capacity in the Department of Public Works and Highways (DPWH) and the Metropolitan Manila Development Authority (MMDA) through joint training sessions and knowledge-sharing, focusing on environmental and social safeguards, procurement, and oversight,” the report said.

“This partnership highlights the critical importance of collaboration and cofinancing in addressing complex urban challenges while promoting environmental sustainability and social welfare,” it added.

As Manila Bulletin reported earlier, the Philippine government and the World Bank in November 2024 signed amendments to their loan agreement for the original $207.6-million project financing, including a two-year extension of the originally seven-year loan implementation period, which was supposed to lapse last year.

On top of the prolonged loan closing date, the World Bank has also agreed to the Philippine government’s proposal to slash $22.7 million each from the two lenders’ counterpart financing.

Despite scaling back the loan terms, the Philippines will continue to repay these concessional or low-interest loans over a 25-year period, inclusive of a 14-year grace period under the original agreement in 2017.

As of May 2025, the Philippine government has disbursed only 47.03 percent, or $86.98 million, out of the $184.94-million WBG investment project financing (IPF).

The challenge is to spend the remaining loan proceeds—amounting to a larger $97.95 million—before they lapse in November 2026.

This project is being jointly implemented by the DPWH, the MMDA, the National Housing Authority (NHA), as well as Metro Manila local government units (LGUs) in the areas covered by the project.

The joint MDB report noted that the Metro Manila Flood Management Project “aims to reduce flood vulnerability and enhance urban resilience through rehabilitating 34 aging pumping stations and constructing four new ones, reducing solid waste in waterways, and resettling 600 informal settler families living near the pumping stations.”

However, implementation had been sluggish—starting with project design, as well as determining the number and location of drainage and pumping station sites. It did not help that red tape delayed procurement.

Since the project’s rollout was prolonged, the bigger implication is that the Philippines missed its original goal of completing it last year to make targeted areas free of water within 24 hours after a major rainfall.

Had this WBG- and AIIB-backed project been implemented as scheduled, flooding experienced in the aftermath of last year’s strong typhoons that battered Metro Manila could have been avoided.