Professional Documents
Culture Documents
January 2011
FIVE REASONS WHY WE OPPOSE THE LRT/MRT FARE HIKE
Bayan opposes the provisionally approved fare hike for the LRT and MRT because of the
following reasons:
1. There is no need for a fare hike. The present fares can already cover the cost of
operation and maintenance of the LRT and MRT. The additional fares government wants
to implement are only meant to increase the direct burden of commuters in paying the
creditors. The DOTC said that the rule of thumb for big infrastructure projects like the
LRT/MRT is that debt accounts for 85 percent of the cost. This is the obligation of the
National Government and not the commuters, who as taxpayers are already servicing
such debts. The MRT debts, in particular, have been also proven to be onerous. It is thus
a double injustice for the commuters to pay more to service these debts when the just
thing to do for government is to seek remedies including the possible renegotiation of
the terms with creditors.
2. The fare hike is anti‐poor. According to the Mega Manila Public Transport Study of
2007, almost 68 percent of regular LRT/MRT commuters earn just less than P 10,000 a
month. Such income is just within the range of the minimum wage rates in Metro
Manila. Forty‐five percent of the commuters earn below the minimum wage. The new
fares will cost a minimum wage earner who is a regular LRT/MRT user as much as 16
percent of his income. Put in the context of increasing fares in alternative modes of
transportation, prices of food and other basic goods, etc. – not to mention the chronic
job scarcity – the LRT/MRT fare hike is unconscionable.
3. Public infrastructure is not business. Government should not consider as losses
the subsidies it provides to LRT/MRT users. Instead, these must be deemed as public
investment that will provide the economy and its human resources new or additional
capacity. The viability of public infrastructures is measured not in narrow financial terms
but in terms of net social and economic gains. Besides, the losses stem not from
commuters paying less than the operation and maintenance costs of the LRT/MRT. The
losses are the results of burdensome contractual and loan obligations that previous
governments inked with the private sector.
4. There are other ways to ease fiscal pressure. We recognize that there is an
urgent need to address the fiscal woes of government. But this should not be at the
expense of the already hard‐pressed masses. Instead, government must negotiate with
creditors to find ways on how to lessen the debt burden. Government must seriously
look into the many projects funded by onerous debts and were bloated by corruption.
Further, creative ways to improve the non‐rail revenues of the LRT/MRT, which at
present is only less than 3 percent of the total, should be pursued and maximized.
5. Fare hike is first step to privatization. Government admits that the long‐term
plan for LRT/MRT is privatization. Thus, the fare hike can also be seen as a scheme to
entice potential investors and showcase the profitability of the rail system. But we
already have around three decades of experience under privatization that includes
water and power utilities. Since last year, we have seen how insecure we remain in our
energy and water needs despite the manifold increases in user fees under privatization.
The fiscal crisis, which privatization was supposed to help address, has not only lingered
but even worsened. The same predicament is true in many countries around the world
where corporations have taken over public utilities and infrastructures. #