DOTC says MRT, LRT fare hike to yield P2-B add’l revenues

MANILA, Philippines - The proposed fare hike for the Metro Rail Transit 3 (MRT3) as well as Light Rail Transit lines 1 and 2 (LRT1 and LRT2) is expected to yield P2.06 billion in additional revenues.

Renato San Jose, director for operations of MRT3 and Light Rail Transit Authority (LRTA), said both the LRTA and MRT3 would earn additional P2.06 billion revenues that would be deducted from the subsidy provided by the national government.

 â€œThis will be deducted from the subsidy that government will continue to provide,” San Jose said.

Of the total amount, about P1.122 billion would come from the MRT3 while P621 million would come from LRT1 and P321 million from LRT2.

Based on its 2012 financial reports, MRT3 incurred a deficit of P7.25 billion as expenses including financial obligations under the Build-Lease-Transfer agreement reached P9.41 billion outpaced revenues that reached P2.16 billion while LRTA recorded a shortfall of P4.7 billion as expenses amounted to P8.37 billion while revenues only reached P3.67 billion.

San Jose said the government intends to adopt a “users pay” principle wherein commuters would be charged based on the distance they travel instead of the number of stations they pass. This would make MRT and LRT fares closer to other public utility vehicles such as jeepneys, FX, UV vans, and buses.

It would be recalled that the LRTA board approved a formula in May 2011 wherein a fixed rate of P11 plus P1 per kilometer would be charged to MRT and LRT passengers. The proposed fare hike was revived when President Aquino stated in his 4th State-of-the-Nation Address (SONA) last July that it was about time to pursue the fare increase.

Using the formula, San Jose told participants of a public consultation held last Thursday that passengers of 17-kilometer MRT3 from North Avenue in Quezon City to Taft Avenue in Pasay City or back would increase to P28 for stored value and single journey tickets from the current fare of P15.

On the other hand, passengers from LRT1 from Baclaran in Paranaque City to Monumento in Caloocan City would have to shell out P30 for single journey and P29 for stored value tickets from the existing P20 fare while passengers of LRT2 from Recto Ave. in Manila to Santolan in Pasig City would pay P24 for stored value and P25 for single journey tickets instead of the existing P15.

He pointed out that the government last raised fares for LRT1 to P15 in 2003 while MRT3 fares have been cut by half to P15 in 2001 from the original fare of 34 when it started in 1999. Fares of LRT2 have remained unchanged.

Despite the increase, he lamented that MRT3 would still book a deficit of P6.13 billion while LRTA would record a shortfall of P3.76 billion.

San Jose said the additional revenues could also be allocated by the national government to projects outside of Metro Manila.

Since the government subsidy is sourced from national funds, this would also mean a more equitable distribution of resources as it is equivalent to 8,240 classrooms, 82 farm-to-market roads, or the irrigation of 11,240 hectares of farmlands.