Press Release
October 12, 2010

Recto: Reexamine planned MRT, LRT fare hikes

Sen.Ralph G. Recto yesterday urged transportation officials to reevaluate plans to increase the fare rates in the Metro Rail Transit 3 (MRT 3) and in the two lines of the Light Rail Transit (LRT), said to be heavily reliant on government subsidy, and justify the proposed increase to the people.

"If the increase seeks to unburden the government of the subsidy it provides to these mass transport systems, then I oppose the plan for being ill-conceived. But if it will be used to improve the services of the MRT and LRT, then further discussions are in order," Recto said after yesterday's hearing of the Senate Committee on Finance on the proposed budget of the Department of Transportation and Communications (DOTC).

"The government may be courting a commuter revolt if it proceeds to hike the fare rates of these rail systems without improving their operations for the benefit of its ridership."

The senator, a vice chairperson of the finance committee, said MRT and LRT passengers who are used to paying a subsidized rate would find it very difficult to shell out more of their hard-earned money without seeing any discernible enhancement in their riding experience.

Transportation officials have earlier stated that the government is spending more than P5 billion a year for MRT 3's operations and maintenance, which is being used as basis for the planned increase in fare rates. The two LRT lines also get subsidies from the national government, although not as high as in the case of MRT 3.

Recto, however, said that is an overly simplified and superficial way of looking at the operations of MRT and LRT, which had been conceived in the first place to provide an essential government service to the people.

"Call it a case of institutional amnesia, but our concerned government officials may be forgetting that these mass rail transits were not envisioned to be financially viable. They were built because they were economically viable, despite the certainty of government subsidy," he said.

He explained that in areas where these mass rail systems pass through, there is an escalation of economic activity that indirectly pays for the subsidy extended by the government.

"Real estate prices go up. The productivity of the throngs of workers who ride the MRT and the LRT also increases, which translates to increased incomes, corporate or otherwise," Recto said.

"And these can be directly converted to increased tax payments. It is my view that whatever government subsidy the MRT and LRT lines receive, it has already been covered by the direct and indirect economic benefits of having mass transit systems that ferry people around Metro Manila faster."

The senator said what the DOTC should do is undertake a study of these economic benefits before proceeding with its plans to jack up the fare rates in the MRT and LRT.

LRT lines 1 and 2 are currently run by the government through the Light Rail Transit Authority, while MRT 3 has already been taken over by the government through LandBank and Development Bank of the Philippines (DBP) from a local private consortium led by the Sobrepeña family.

The 17-kilometer MRT 3 stretches from Taft Avenue in Pasay City to North Avenue in Quezon City and will be linked to the LRT Line 1, which goes from Baclaran in Pasay City to Monumento in Caloocan.

LRT Line 2, meanwhile, currently has eleven stations and stretches from Claro M. Recto Ave. in Manila to Santolan in Pasig City.

The current fare rate in MRT 3 is P11 to P14, depending on the distance, while it is P10 to P15 in LRT Line 1 and P12 to P14 in LRT Line 2.

The proposed increase in the MRT 3 fare rate is from P14 pesos to P20 or P25, which the government describes as still less than the subsidy it gives to each passenger, which is estimated at P45.

The increases in fare rates in the two LRT lines are still the subject of deliberation.

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