Officials grilled in LRT-MRT fare hike hearing over plans to 'decrease subsidy'
MANILA, Philippines — Officials of the Light Rail Transit Authority, Metro Rail Transit Line 3 and the Light Rail Manila Corporation were quizzed by stakeholders, Friday, regarding the former's push to increase fares in the LRT-1, LRT-2 and MRT-3 amid the Congress' already approved budget in 2023.
In a public hearing headed by the Department of Transportation (DOTr), representatives from the state-run LRTA, privately-owned MRT-3 and LRMC explained that a direct effect of the fare hikes would mean less government subsidy for the railways.
"Did the Department of Budget and Management, Department of Finance, the Malacañang give a directive to the Congress to decrease the subsidy? Was there an order that you need to hike fares to lessen the subsidy?" Bagong Alyansang Makabayan secretary general Renato Reyes Jr. said in Filipino during the hearing.
"Because as far as we know, Congress already appropriated for this year. We didn't hear a directive from the Congress to decrease the subsidy, so why the hike?"
The LRTA earlier petitioned for an additional P2.50 increase in the LRT-1 and LRT-2 while the MRT-3 is gunning for around P3 to P4.
It could be remembered that President Ferdinand Marcos Jr. signed into law the P5.26 trillion budget for 2023, his first full-year outlay under his administration.
In their presentation, the LRT-2 said that it is currently subsidizes 51% of the cost per passenger (break even fare), which they aim to bring down to 46%.
An LRTA official also explained that not all passengers experienced an increase in fare. "So 'yung atin pong magiging kita for the fare adjustment is P114[.06] million. And pupunta po ito sa payment for common carrier's tax at pandagdag po sa aming operational expenses."
The LRTA presented the following projects that could possibly be funded by the additional fares should it be approved:
'Fare deficit to worsen without fare hikes'
According to a representative from the LRMC, operator of the LRT-1, they have not increased fares in the said train line since 2015.
Deficits, according to them, could reach P5.7 billion if their request for fare hike will not be granted since power rates and inflation have increased tremendously.
Jhimmy Santiago, general counsel for LRMC, also pointed out that nearly all modes of transportation were allowed to hike fares, except LRT-1.
"LRT-1 right now is the cheapeast mode of mass public transportation. We are even cheaper than jeepney [fares]... In comparison to other Asian countries, we have the lowest fares," he continued partly in Filipino.
LRMC, operator of LRT 1, argued that they have not increased fares since 2015. Deficit could reach P5.7 billion if their request for fare hike will not be granted, considering that power rates and inflation have shot up significantly.
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Their concession agreement with the government earlier stated that fares should adjust automatically every two years, a move heavily criticized by transport groups and common commuters as a heavy burden. However, none of their petitions were acted upon.
Reyes earlier warned about the "sovereign guarantees" present in LRMC's contract with the state, saying that the government will shoulder the difference between the current fares and the proposed fares should a proposed fare hike be not approved.
Terry Ridon, a lawyer and convenor of think tank Infrawatch PH, said fare hikes should only be discussed if the government states that will no longer give subsidy.
"We have private concessionaire. If we have to renegotiate, how to achieve the fare deficit, that should be discussed by the two parties: private concessionaire, private component and the government itself."
Effect to everyday students, workers
Representatives of Kabataan party-list, Anakbayan and a group of factory workers were also present in the hearing, explaining the negative effects of a possible fare hike.
The said youth groups claim that a lot of students will feel its brunt especially that face-to-face classes are again in full swing while minimum wages are still not up to par with the family living wage.
The highest minimum wage in the National Capital Region is still pegged at P570 while the family living wage for a family of five is said to be at Php1,161.
January 2023 inflation sizzled at 8.7%, the fastest accelaration in the prices of goods and commodities in the Philippines in more than 14 years.
Instead of lessening state subsidy for said lines, the groups challenged the government to further increase it to better serve the public without additional costs.
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