EVERY DAY, thousands of workers, students and tourists depend on the Metro Rail Transit (MRT) Line 3 and the Light Rail Transit (LRT) Lines 1 and 2 as a primary mode of transportation. The transit systems are popular among commuters not only because they reduce the travel time for riders, but also because the fare costs less compared to road-based public transports such as buses and jeepneys.

Recently, talk of a fare increase for the MRT and the LRT has resurfaced. Despite its approval by the Department of Transportation and Communications (DOTC) in 2011, all fare hike proposals were deferred. Last year, President Benigno “Noynoy” Aquino III decided to suspend the implementation after a public consultation was held, in which militant and consumer groups opposed the fare hike.

Light Rail Transportation Authority (LRTA) Spokesperson Hernando Cabrera explains that “the [projected date] for the implementation, which was slated in June 2013, coincided with the price hike for other household expenses such as oil and jeep fare.” “We just don’t want to add to the consumer’s burden,” he adds.

But this does not mean that the fare hike will not happen soon. Although the implementation date is yet to be finalized, the price hike seems inevitable as the government plans to reduce subsidy and upgrade the existing rail systems.

Subsidizing the system

Under the new fare adjustment, commuters will be charged based on the distance they travel instead of the number of stations they pass. The formula is simple: Passengers will pay a boarding fee of P11 plus an additional P1 per kilometer travelled.

Currently, the maximum fares for the MRT 3 and the LRT 2 are P15 per passenger, while commuters taking the LRT 1 are charged up to P20. Under the fare adjustment, the MRT 3, LRT 1 and LRT 2 riders will be paying up to P28, P29 and P24, respectively.

Once imposed, the increase is estimated to rake P3-billion worth of revenue for the LRTA. However, Cabrera admits that even with the additional revenue, government subsidy will still be needed as the earned revenue will not be able to cover all expenses by the transit systems. He explains that on a yearly basis, the government provides the LRT and the MRT a subsidy of about P10 B. Given these estimated figures, the government will shoulder the remaining P7 B.

According to Department of Economics Professor Victor Venida, who has a doctorate in economics, “the aim of mass transit is to provide low- and middle-income commuters access to affordable mobility.” He argues that even if raising fares reduces the cost of subsidy to the government, “it defeats its purpose of providing an affordable option to commuters.”

Venida also suggests “value capture” as an alternative to subsidy vis-à-vis the trend of malls surrounding the LRT and the MRT such as TriNoma, Shangri-La Plaza and SM Megamall. “[The] government can claim a substantial percentage of the property taxes in these areas since the value of property increased precisely because of the access to the trains,” Venida adds.

Under repair

According to Cabrera, “the proceeds for the fair adjustment will be used for the rehabilitation and upgrading of the existing [railway] systems.”

He explains that the money the LRTA earns from the current fare scheme is only enough for its daily maintenance and operations cost. “We have to remember that maintenance is maintenance; it is different from rehabilitation and upgrading,” he says. “When you say rehabilitation and upgrading, you have to make changes [in the] system, you have to improve it, not only maintain it.”

Cabrera also highlights the perpetual need to improve the depreciating rail system, fixing electrical wirings, escalator, elevator and rails. The LRT 1 and 2, and MRT 3 are 30, 10 and 15 years old, respectively.

Allison Lagarde, a junior management major who rides the LRT 1 and the LRT 2 daily, says that there is a need to address the current situation of the transits, especially its facilities and services. According to her, the most important issues that the government must fix are the overloading of train cars, inefficiency of the ticketing system and the overcrowded platforms.

Foresight and privatization

Meanwhile, research group Ibon Foundation sees a lack of basis in fare increase and suspects the move as a bait to lure investors for the LRT 1 privatization. They say that the project poses financial burden to the public, along with the increasing prices in water and electricity.

Recently, both the Metro Pacific Investments Corporation and Ayala Corporation won the bid for the LRT 1 extension project, which goes south to Bacoor, Cavite. The San Miguel Corporation is also funding the construction of the newly approved MRT 7, which will bridge Quezon City and San Jose del Monte, Bulacan.

Consequently, Business Mirror reported that the government asked for the fare hike to push through to revive the privatization of the LRT 1. “If the privatization results in improved management, then this will benefit commuters. But if this is financed by fare hikes, then, as stated, this reduces the take home pay and well-being of commuters,” Venida argues.

According to Cabrera, both LRT lines are maintained by private companies but owned and operated by the government. On the other hand, the government operates the MRT 3 despite being privately owned and maintained.

As for the LRT 1 extension project, Cabrera explains that the private sector will gain access to its maintenance and construction. “Once finished and awarded to the [private company, they] will not only maintain what it constructed but also the existing [line]—the whole [LRT 1],” he adds in Filipino.

Cabrera clarifies that fare hike will proceed even without privatization and other projects. “Even if this one is transferred to the private [companies], they would not decide on the fare adjustment… The government will still decide on it,” Cabrera says in a mix of English and Filipino.

With the fare increase, Venida predicts a reduction in travel, affecting many citizens in “finding work in the main business districts.” “Many will still take the ride as demand for mass transit is price-inelastic, but it will reduce their take-home pay,” he says. Inelasticity implies that fare increase has little effect to the demand.

Despite all of this, Cabrera promises physical changes in all transit lines by 2015. In its vision, LRTA aims to provide “integrated urban rail transport systems of the country by 2017.”

For now, Venida is unsure of how the fare hike helps in system efficiency. “That remains to be seen. It is supposed to, but the competence ofcurrent management is questionable,” he says.

The cost of public transportation for Metro Manila commuters has varied through the years.

Research by Frances P. Sayson

Sources: lrta.gov.ph, ltfrb.gov.ph, dotcmrt3.gov.ph, abs-cbnnews.com, inquirer.net, gmanetwork.com, rappler.com, metroeasy.com, urbanrail.net, news.bbc.co.uk, tripadvisor.com, lonelyplanet.com

The cost of public transportation for Metro Manila commuters has varied through the years.

Jeepney

            The fare of one of the country’s most popular vehicles has fluctuated over the years, with more than 15 price increases and decreases over the last three decades. Earlier this year, the Land Transportation Franchising and Regulatory Board approved a fare hike that placed the fare at P8.50 for regular passengers, with P1.50 for every succeeding kilometer. Students, persons with disabilities and qualified senior citizens are given a 20% discount, which reduces their minimum fare to P6.80.

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Bus

            From 1987 to 1990, the fare for the first five kilometers on a non-air-conditioned public bus was P1.00. Succeeding price fluctuations over the years brought the current fare to P10.00 for the first five kilometers and P1.85 for every succeeding kilometer.

LRT 1 and 2, MRT 3

In terms of public transport fares, the Metro Rail Transit (MRT) and Light Rail Transit (LRT) systems are still the most hotly contested. The government has called for fare hikes, citing the need for more trains and improved services. However, commuter groups have opposed the hikes, and talks about planned fare increases are currently at a standstill.

Taxis

The flagdown rate for taxis in 1987 was P2.50, with P1.00 for every succeeding 325 meters. It has since been increased five times over the last 24 years, to the current rate of P40.00, with an additional P3.50 per succeeding 300 kilometer.

By Roxie Y. Ramirez and Chynna A. Santos

Unlike in other countries where the government operates, controls and subsidizes the bus system, the Philippines relies on private companies.

Prior to 2012, many of these companies used the boundary system, wherein the company owned the vehicles. These vehicles are then leased to the bus drivers, provided that they pay a fixed minimum daily fee, also called the “boundary.” Drivers were free to pocket the money left over after paying the boundary fee.

This sort of system brought about several problems, however.  Since drivers were expected to pay a set fee, many of them would work beyond the legal eight hours just to meet the amount. The boundary system was also accused of creating reckless bus drivers.

On July 1, 2012, this boundary system was scrapped, thanks to Department Order 118-02. The order introduced the implementation of a two-tier wage system, ensuring that bus drivers get minimum wage as well as a commission from their daily earnings.  The order also required bus companies to provide work safety, and health policies and programs for their drivers.

The revamped wage system also serves as an answer to multiple bus-related accidents. A mishap involving an Eso-Nice Transit bus falling into a 100-foot deep ravine in Benguet province is an example. The accident, which occurred last August 10, 2010, killed 41 people and injured another nine.

But the new wage system is but a small change in comparison to the Department of Transportation and Communications’ (DOTC) plans for a bus rapid transit (BRT) system.

The BRT, simply put, operates similarly to a railway transit system except with buses instead of trains. The buses will utilize routes, roads, lanes and stations designed specially for the BRT so as to avoid traffic and delay.

Although the DOTC only announced plans for the BRT in Metro Manila in October of last year, plans for a BRT system in Cebu formally began in 2008. The system is expected to be fully functional by 2015, and if successful, the Cebu BRT may serve as a template for the proposed Metro Manila BRT, to span the Quezon Circle-to-Manila City Hall route.

According to a report by ABS-CBN News, Transportation Secretary Jun Abaya told reporters last July 2 that the success of BRT systems abroad—most notably in Bogota, Colombia—could be attributed to the segregated lanes and priority routes, which contributed to the systems’ efficiency and safety.

“BRT’s are game-changers,” he said. “They are as effective as rail systems in terms of moving people around quickly and efficiently, but are much cheaper to build and are faster to develop.”

As of now, no timeframe has been set for the Metro Manila BRT system.