The Makati City local government (LGU) will be pulling out of a settlement agreement, in which the LGU was slated to pay Philippine Infradev Holdings P11.3 billion for losses incurred after the suspension of the Makati subway project. According to Makati Mayor Nancy Binay, the city no longer has the budget for the remaining year to pay the settlement.
In a press conference on Tuesday, July 8, Makati Legal Officer Ava Ramel said that arbitrating body Singapore International Arbitration Center gave the LGU until Friday, July 11, to submit its decision.
This comes after the LGU, under former Mayor Abby Binay — the current mayor’s sister — entered what Nancy called a “midnight settlement” with Philippine Infradev on June 23, just a week before the end of her mayoral term. The settlement requires the city government to pay P8.96 billion, not counting penalty interest and liquidated damages.
However, the city cannot afford to pay the settlement amounting to P11.3 billion, as its remaining budget for the year is at P 8.4 billion, Rappler reports.
The city’s transition team also found that the previous administration had not turned over enough documentation on the subway project and the settlement. Team head Cristian Robert Lim said Nancy’s administration only received a small box of contracts, annexes, and appraisals, but no documentation on the project’s progress.
Suspended Subway Project
Preparatory work for the Makati Intra-city Subway began in 2018, with Philippine Infradev overseeing construction under its joint venture agreement (JVA) with the LGU. The city subway was set to be integrated into the bigger Metro Manila subway project and was expecting completion by the end of 2025.
In 2023, however, Makati lost to Taguig City in a dispute over 10 EMBO barangays. The subway project was suspended as its depot and some planned stations were located in the EMBOs, which incurred a P44-billion loss for Philippine Infradev and prompted the developer to exit the JVA with the city in May 2025.
In June, Makati and Philippine Infradev entered an agreement requiring the city to pay the settlement within 90 days.
