The new rates in the Light Rail Transit (LRT 1 and 2) and Metro Rail Transit 3 (MRT) systems which were implemented over the holiday season has many sectors screaming bloody murder. The rate increases which adversely affect almost half a million commuters who use the transit system to get around Metro Manila, were implemented through Department of Transportation and Communications (DOTC) Department Order No. 2014-014 dated December 18, 2014. This provided the “distance-based fare scheme using the P11 base fare plus an additional P1 per kilometer thereafter in accordance with the board resolution of the Light Rail Transit Authority (LRTA) with concurrence of the Land Transportation Franchising Regulatory Board (LTFRB) and the recommendation of the MRT-3 Office.” With this, the full length rate for an MRT-3 trip from North Avenue to Taft Avenue in Manila now costs P28 pesos from the original P15; while for an LRT 1 trip from Roosevelt Avenue to Baclaran, commuters now will have to pay P30, from its original P20 rate. Likewise, an LRT 2 trip from C.M. Recto to Santolan Road in Pasig City will now cost commuters P25 instead of the original P15.
Through the rate increases (labelled as “treacherous” by a number of sectors including some legislators), the MRT-3 hopes to generate an additional P1.122 billion in revenues while the LRT 1 and 2 aim to generate some P942 million. The move likewise aims to ease government subsidies on the mass transport systems from P12 billion to P10 billion. Accordingly, the P2 billion savings is to be allocated in other areas like Visayas and Mindanao. It however, was done without the benefit of public hearings as required by law. For this reason Senators Chiz Escudero and Grace Poe, reportedly aims to grill DOTC and DBM Secretaries Jose Abaya and Butch Abad when they appear before the Senate. Likewise Catanduanes Rep. Cesar V. Sarmiento has also reportedly warned that Congress will not have second thoughts on suspending the fare rate increase if the invited representatives from the DOTC, LRT, MRT and PNR fail to justify this at a committee hearing scheduled today. To put some perspective on the issue, it is an accepted fact that most mass transit systems in the world (with the exception of Hong Kong and Singapore) are heavily subsidized by their governments.
The reason why mass train systems are heavily subsidized is because they are a great equalizer between the rich and the poor. In an efficient train system, the poor man can time his commute precisely just like the way a chauffeured rich man can accurately time his commute. If we are insistent on going the way of having these public utilities self-sufficient through privatization, then let us emulate HK and Singapore which lowers the rate of train fees by supplementing their income through real estate businesses which are connected to their mass railway system like rental income in their outlet stations. Also, big businesses which directly profit from the MRT and LRT should shoulder a big chunk of the concessionaire’s fee. These businesses like Gateway in Cubao, Trinoma in North Ave, and SM in Ayala station profit from the steady stream of traffic in their malls.
When I was the Oversight Committee Chairman, I did not oppose calls to raise the train fares to a more reasonable level so that the proper improvements can be made while former president Gloria Macapagal Arroyo opposed the increase in consideration of the commuting public. Recent events signal the need to improve the railway seemingly justifying the increase, but data presented from the Ibon Foundation showing that the Operating and Maintenance (O&M) cost per passenger is just 15 percent of the full fare cost and statements from DOTC officials admitting that 85 percent of the MRT and LRT costs are for debt servicing and interest payments, however, merit a careful review of the increases. Hence, my challenge to this administration is to implement first the needed reforms before raising the train fares. The fare hike would be justified if and when improvements in the operation, safety and commuter comforts are finally provided by the LRT and MRT, and when we similarly satisfy the need to determine whether or not government subsidy to these mass transit systems provide the general riding public a much-needed relief from the high cost of transportation.