The Department of Transportation (DOTr) has deferred the implementation of the approved fare increase for the Light Rail Transit (LRT) lines 1 and 2 in compliance with the directive of President Ferdinand Marcos Jr.
In a press briefing, DOTr Secretary Jaime Bautista said the agency approved on March 27 the Rail Regulatory Unit’s (RRU) recommendation to increase LRT-1 and LRT-2’s boarding fare by P2.29, plus P0.21 additional distance fee for every kilometer.
“We reported this to the President. The instruction of the President is to reassess the date of our implementation for us to be able to determine the impact on inflation, since the inflation rate has also gone up in the last two months,” said Bautista who also chairs the RRU.
He added the DOTr will comply with the President’s instruction and will carefully study the economic repercussions of the increase to the passengers of the three major rail lines.
“In compliance with the President’s instruction, we will thoroughly study how a fare hike today will impact on passengers of our three rail lines in Metro Manila,” Bautista said.
“As far as the rate is concerned, it’s already approved but the implementation will be announced after we have conferred with NEDA (National Economic and Development Authority) and then referred this back to the board of LRTA (Light Rail Transit Authority)…it will take a few months (for it to be implemented),” he added.
With the approved fare hike, DOTr data showed LRT-1 and LRT-2’s current boarding fare of P11 will increase to P13.29 while the distance fare will go up from P1 per km to P1.21 per km.
The last approved fare hike for the LRT-2 and Metro Rail Transit-3 (MRT-3) was back in 2015. LRT-1, which was privatized in 2015, filed petitions for fare adjustments in 2016, 2018, 2020 and 2022.
Light Rail Manila Corp. (LRMC), which operates LRT-1, is allowed to apply for fare adjustments “of at least 10.25 percent every two years after the effectivity of the contract.”
Bautista said proceeds of the increase would have been used for the technical capability, services and facilities of the two rail lines.
“The fare increase will enable the two rail lines (LRT-1 and LRT-2) to improve their services, facilities, and technical capabilities,” he said.
LRTA intends to allocate additional fund for LRT-2’s maintenance and other operating expenses, Jorjette Aquino, DOTr assistant secretary for rail, said during the press briefing.
Aquino noted the LRTA’s plan to allocate 97 percent or about P110 million of the expected P114 million additional rail revenues to augment funds for maintenance and other operating expenses, and as sufficient resources for repair and maintenance that will help improve the turnaround time of equipment as well as the timely conduct of preventive maintenance activities for optimal performance of critical rail systems and facilities.
Aquino added LRTA’s deficit for 2023 is projected at P8.5 billion. It has been operating at a loss and relying on government subsidies for its operation and maintenance as reflected in its financial performance in 2022 when it incurred a deficit of about P7.006 billion.
On the part of LRMC, the fare deficit on the notional fare prescribed in its concession agreement with the government is P1.46 billion while the actual fare is 50 percent behind the notional fare, as the last fare increase occurred more than eight years ago in January 2015, Aquino said.
“As to the reasonableness of the fare rates being requested by LRMC which is an additional P5.46 for boarding fare and P0.50 for distance fare, the LRTA board of directors in October 2022 only approved additional P2.29 onboarding fare and P0.21 on distance fare which is for the 2018 fare adjustment, as it will have the least effect on the riding public’s commuting expenses and in consideration of the current economic condition of the country,” Aquino said.
Meanwhile, Bautista said the fare increase for MRT-3 was also deferred “due to infirmities in complying with the requirements and procedure.”
Aquino said as MRT-3 failed to comply with the required notice and publication, the hearing officer recommended that the MRT-3 comply first with the requirement.
