Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Increasing LRT/MRT Fares

Posted by butalidnl on 2 August 2010

The government is studying the possibility of raising the fares for the LRT and MRT; they will probably raise the fares by September. And while many people will be adversely affected, I think it would generally be a good idea that they do get raised.

Well, the first reason why I think so is that I think that LRT/MRT rates are a bit too cheap. Take the MRT – you could go from one end (almost) of EDSA to the other for 15 pesos. With this amount, you get to ride a fast, airconditioned vehicle all the way (of course, they tend to be quite overcrowded, but that’s beside the point). If you were to ride an aircon bus or FX for the same route, you will pay way more than 30 pesos. Obviously, the government has been subsidizing the MRT like crazy, and that’s why it is so cheap.

The government now wants to cut the subsidy it gives to the LRT/MRT.  They are not saying that they plan to cut the subsidy to zero, just that they don’t want to subsidize it that much anymore. In a sense, it is a good idea. If you think of it, a government subsidy would mean that everybody in the country (including the poor guys in Mindanao) is paying money for the LRT/MRT, and only the people in Metro Manila (and not even all the people there) get to enjoy it. There is something not very fair about this subsidy set-up.

Transportation Infrastructure
Thus, there is a case for cutting the amount of subsidy to the operations of the LRT/MRT. But what do we exactly mean by “operations”? Part of the government “subsidy” goes to the maintenance of the physical infrastructure of the LRT/MRT system. But wouldn’t this be equivalent to the government “subsidy” towards the maintenance of the country’s  road system? After all, cars, jeepneys and buses don’t pay directly for the maintenance of the road system. Funds for this are rightly taken from the general government budget. Thus, it would probably be right for the government to simply shoulder LRT/MRT infrastructure maintenance as part of its expense in maintaining the transportation infrastructure . In other words, a “subsidy” for this would be justified.

Now, let us look at the security in the LRT/MRT system. This is mostly handled by company security guards. In other countries, the security for their metro systems is done by a special unit of the police force (the “Railroad Police”), which is paid for by the taxpayers. A “Railroad Police” force would be similar in function with Highway Police, except of course, that their area of operations would be the railroads. So, if the rail transit companies instead hire security guards, I think it would also be justifiable for this expense to be shouldered by the national budget. The Philippines could also consider forming a “Railroad Police” unit for the LRT/MRT system, which would take over the functions of the private security guards.

Rough Equivalence with Other PUVs
Once we deduct the amounts for infrastructure maintenance and security, we would come up with the real subsidy the government pays for the mass transit systems. And, if we were to take this amount, the resulting fare would be still higher than the equivalent bus ride. And this would be natural, since after all the LRT/MRT is faster and potentially more comfortable than the equivalent bus ride.

I think that the government then will need to also consider other things that have to do with rail transport. One of this would be regarding the amount of pollution that the LRT/MRT system DOES NOT produce. This would mean a lot, since everyone suffers from pollution, not only of carbon dioxide, but especially from soot and other gases that come out of vehicles. The LRT/MRT system is relatively clean, and this should be worth some kind of subsidy.

The main thing that is left, with regards to fares, would be its “affordability”. Passengers would need to afford the LRT/MRT, or else they won’t use it, and that will be an even bigger waste of money.  I think that the key would be to base it, more or less, on the equivalent bus fare. And, in this, I think the LRT/MRT should concentrate more on serving passengers who have longer rides, that those with shorter trips.

For the MRT, I would suggest that the fare be raised from the present 12 pesos for the first five stations, and 15 pesos for longer trips, to a simple flat rate of 20 pesos for all trips. This would mean that passengers on longer trips will have a 33% increase, while those with shorter trips will have an increase of 67%. This should discourage people with shorter trips from riding the MRT, while not be too expensive for those with longer trips (since it would be roughly equivalent to their bus fare).

And the resulting “subsidy”, if  we extract infrastructure maintenance and security, would not be too big anymore. And, whatever the amount that is left, should then be ascribed to the cost of controlling pollution and decongesting our streets.

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