The World Bank has canceled US$84.9 million in funding for the Cebu Bus Rapid Transit (CBRT) project following a request by the Philippine government for partial cancellation and restructuring. The decision stems from prolonged implementation delays and the failure to complete major components before the loan’s expiration on September 30, 2026.
Government Request and Loan Cancellation
According to a restructuring paper released by the World Bank, the Department of Finance (DOF) sent a letter on January 14 requesting partial cancellation after government agencies agreed during a portfolio review meeting in July 2025 that the loan should not be extended further. Effective January 22, 2026, the World Bank canceled US$59.9 million from the International Bank for Reconstruction and Development (IBRD) loan and the entire US$25 million Clean Technology Fund (CTF) grant, totaling US$84.9 million.
Project Background and Delays
The project, approved in 2014, aimed to improve public transportation in Cebu City through BRT infrastructure, traffic management systems, and other urban mobility improvements. However, implementation lagged after a change in administration in 2016 and was further exacerbated by the COVID-19 pandemic, funding shortages, procurement delays, and a lack of technical personnel. The World Bank rated both the Implementation Progress and Progress toward achieving its Development Objective as “Unsatisfactory.”
After nearly 11 years, only Civil Works Package 1 (CW1)—a 2.38-kilometer BRT lane from the Cebu South Bus Terminal to the Provincial Capitol—is nearly complete.
Restructuring Details
Under the restructuring, the World Bank removed Civil Works Packages 2 and 3, which would have included additional BRT lanes, stations, terminals, a depot at SRP, and feeder routes to Talamban and Talisay. Although engineering designs for these packages were finished, procurement for contractors never started due to slow right-of-way acquisition and resettlement, making completion before the loan deadline impossible.
The World Bank also reduced funding for traffic management from US$21.5 million to US$1.7 million, effectively canceling the Area Traffic Control (ATC) system, intersection signal control, and Intelligent Transport System (ITS) infrastructure. The report noted that procurement for the project remains “Unsatisfactory,” with bidding documents for Packages 2 and 3 not issued and procurement for ATC and ITS not started.
Interim Operations and Concerns
Despite the restructuring, the government plans to launch interim CBRT operations before the project ends on September 30, 2026, using the completed CW1 corridor between IL Corso at SRP and IT Park with the existing CIBUS fleet. However, the World Bank warned that the 2.38-kilometer completed BRT segment is too short to demonstrate the full benefits of a Bus Rapid Transit system.
Without Area Traffic Control and Intelligent Transport Systems, operations will rely heavily on traffic enforcers and station personnel to manage traffic and passengers. “Otherwise, the report warned, expected improvements in passenger satisfaction and road safety may not be achieved,” the document stated.
Remaining Financing and Focus
After the restructuring, total World Bank financing dropped to US$56.1 million, of which US$42.93 million (76.52 percent) has already been disbursed. Remaining activities will focus on completing CW1, project management, selected consultancy services, and preparations for interim CBRT operations.
