Sound economics over poor administration


The deteriorating operations of the MRT have people clamoring for a fare reduction in all the light rail lines. Those calls, which are likely to be ignored, come just six months after the Department of Transportation and Communications (DOTC) increased fares, which it justified by pointing out that more than a decade has passed since the last price adjustment. That happened in 2003 when the LRT 1 raised its fare. The fares for LRT 2 and MRT have not increased since they started operating, and in the case of the latter, its fare was even rolled back.

In related news, the Philippine National Railways (PNR) administrators are also seeking a fare increase, which would be the first adjustment in 20 years if approved. The fare hike is supposed to help fund the much-needed rehabilitation of the rail system. But as in the case of the light rail network, it may be expected that commuters would protest the increase given PNR’s poor condition. As of this writing, in fact, its operations remain suspended after the derailment incident near Magallanes in late April.

In general, we agree that subsidies make for a bad policy. As they say in economics, there is no such thing as a free lunch. The true cost of running the railway and light rail systems has to come from somewhere. Typically, they come from taxpayers. But as suggested by what has been reported in the news, safety and maintenance have been sacrificed as well.

This is a case of government using sound economic principles as a cover for the inept management of the rail and light rail systems. In other words, raising the fares to cover the true cost of operations may be the better economic policy, but commuters and the public in general are also right in demanding better service and safety.

Government on a slow track
Under President Aquino’s watch, there have been more accidents in the rail and light rail networks than in the past. He has been quick to blame previous administrations for the problems, but slow in doing something about them.

In fairness to him, some improvement projects are underway. New light rail cars have been ordered, and if all goes according to plan, they should be delivered later this year. At the PNR, work to add a second railway between Sucat and Alabang is scheduled to start in the third quarter. Plus, the Transportation department is looking to revive the PNR line from Malolos to Legazpi City by 2020. While it would have been better to have these projects started earlier in President Aquino’s term, the consolation is that they are in the pipeline.

Going beyond the rehabilitation and development of the train transport system, we hope that President Aquino and his allies in Congress would look into the root causes of the problems in this transport service. First, they should address the incompetent management of the rail systems. Priority should be given to maintenance and safety issues, and the review should be conducted by an independent body. Besides probing operations, it should also audit the advertising income generated in the light rail stations and other pieces of property. How much advertising revenue is actually generated, and how is it spent? We hope that it would contribute to improving public service and safety.

Second, we hope that there would be a deeper probe into the allegations of graft and corruption in the rail and light rail sector. Again in fairness to this government, the Philippine railways have been linked to questionable practices long before President Aquino took office. But regardless of when the corrupt practices started, the focus should be on stopping them.

Last, we urge the government to initiate more development projects before the President steps down in 2016. While he has been going in the right direction in his “last two minutes” in office, much more is needed. So far, for instance, the focus of the projects has been on commuter train service. We have yet to hear programs to develop cargo rail, which would take big trucks off roads and help ease traffic congestion. That highlights the point that so much more needs to be done.


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  1. Larry Ebersole on

    when money is the first priority of our statesmen, this is what we get. We are rejoicing about the burst of PPP projects being bidded out by the PENOY government without looking closely at the reasons why?
    1. why all of a sudden , on his last stand in office did they started to do all the projects- reason is they can corner all the SOP and run away with it; how much do you think does a contractor has to give to the proponent to get a juicy contract,read between the lines and you will see billions.they want the cake and eat it too.
    2. the MRT is a case in fact where the DOTC did not pressure the erring contractor instead it took over the operations and now sub-contracted into seven sections with the same people who are the erring contractor’s themselves with other partners of course, and the budget of maintenance multiplied several times.
    3.look at our expressways,how many times they had been re-contracted after the roads were fully paid? and amazingly even charging the riding public higher rates than before? how can that be when the major cost of the road which is land acquisition is already paid for and the new contractor is only for maintaining? this is because of the billions of SOP that has to be given by the winning bidder to people in the government just to win the sure source of money for how many years and a guarranty of good ROI by the government.toyong ordinary people ay niluto sa sariling mantica as the saying goes.

  2. Bruce Reynolds on

    I should point out that the ‘new right rail cars’ that have been ordered from China are hardly an improvement because they were meant to run on normal, not light, elevated rails. As such they have to be converted which entails extra expense and added delays. Apparently vested interests prevented DOTC from accepting the no-cost-to-government rehab from Metro Pacific in favor of trains that are essentially inadequately tested prototypes. That being the case I would like a rebate in my train fare for volunteering to be government’s living crash-test dummy.

  3. Alex Castillo on

    I am extremely exhausted , sick and tired of the daily events on MRT and LRT trains such as delayed trips, accidents, increase fares, broken AC , long lines at the ticket booth, pushy crowds at the jampacked and sardines train.MRT management and current admin. are waiting for a major catastrophe to happen Or when all hell breaks loose then and ONLY then they will ACT and DO SOMETHING. Or Maybe not. It will be business as usual. May GOD, by the power of the holy spirit BLESS and protect the RESILIENCE and PERSEVERANCE of the filipino people .

  4. jason bourne on

    If they have focused their energies on all of the above suggestions since day 1 they would have reaped the fruits of their efforts by now. Only in the Philippines were the Cart comes before the Horse.

    • sinabi mo pa sa mga guro nga e 80,000 ang mawawalan ng trabaho dahil sa walang pag iisip na pag impose ng k-12 na kulang kulang ang mga books, rooms at iba pa