In a restructuring paper posted on the World Bank website, the government requested the cancellation of unutilized loan proceeds through a Jan. 14, 2026 letter from the Department of Finance, received by the financial institution on Jan. 22, 2026.
The government is seeking to avoid paying the remaining $59.9 million loan from the International Bank for Reconstruction and Development (IBRD), as well as the unused $25 million from the Clean Technology Fund (CTF).
This would reduce the total IBRD loan for the CBRT by more than 50 percent—from $116 million to $56 million.
The World Bank said the Philippine government recognized its inability to complete the remaining phases of the project by September 2026, the closing date. Cancelling the unwithdrawn loan proceeds would minimize future commitment fees that the government would otherwise have to pay on unused funds.
The cancellation of the unwithdrawn loan balance is allowed under the IBRD General Conditions loan agreement, the World Bank added.
Fourth restructuring
The project has undergone several restructurings since its approval in September 2014, largely due to delays in its implementation, particularly in the early years. The World Bank said these were caused by changes in national and local leadership following the 2016 elections, which put project implementation on hold for an extended period.
It was also affected by the COVID-19 pandemic and quarantine protocols in March 2020, which limited the deployment of international and local consultants and slowed government activities related to the project.
The first restructuring extended the project timeline by two years to June 30, 2023. Two subsequent restructurings pushed the closing date further to September 2023 and then to Jan. 30, 2024. The fourth restructuring revised the project scope and extended the final closing date to Sept. 30, 2026.
The CBRT, considered the first of its kind in the country, was envisioned to modernize Cebu City’s urban passenger transport system. It was designed to span 12.16 kilometers from Barangay Bulacao in the south to Barangay Talamban in the north, with 17 stations and 28.8 kilometers of feeder services.
Pilot run
The project consists of three phases, but only one has been substantially completed. Phase 1 covers 2.38 kilometers of dedicated BRT lanes between the Cebu South Bus Terminal and the Capitol, includes four stations, and features 1.2 kilometers of urban improvements.
A pilot run began on March 13, covering the route from South Road Properties to Cebu IT Park in Barangay Lahug. However, only the Phase 1 corridor—from Natalio Bacalso Avenue to the Capitol—has dedicated median lanes for CBRT buses. Outside this stretch, buses compete with other public and private vehicles, contributing to slower travel times.
The World Bank noted that Phases 2 and 3—which include 10.8 kilometers of trunk bus lanes and 18 kilometers of mixed-traffic operations—have yet to begin. Other components, such as traffic management and project management systems, have also not materialized.
Funding sources
Aside from the $116- million IBRD loan and the $25-million CTF financing, the project has two other funding sources: the Agence Française de Développement (AFD), which provided parallel financing of €50.89 million (about $57.5 million), and the Philippine government, which committed $30 million in counterpart funding for land acquisition and resettlement.
The original infrastructure scope also included a 3.8-kilometer dedicated busway from Barangay Mambaling to Barangay Bulacao.
This component was later removed during a 2024 restructuring due to extensive resettlement requirements and was to be implemented separately by the Philippine government. —Ed: Corrie S. Narisma
Contributor
