MANILA -- The Department of Transportation and Communications (DOTC) has finally set the date for the implementation of the fare increase for the Metro Rail Transit Line 3 (MRT-3) and Light Rail Transit Lines 1 and 2 (LRT-1 and LRT-2).
After several years of delay, the implementation of the P 11.00 (base fare) + P 1.00 (per kilometer) formula for fares at the MRT-3, LRT 1, and 2 will take effect on January 4, 2015.
"It's a tough decision, but it had to be made. It's been several years since an increase was proposed. We delayed its implementation one last time until after the Christmas season. While 2015 will see increased fares, it will also see marked improvements in our LRT and MRT services," said DOTC Secretary Jun Abaya.
Despite inflation and rising operational costs over the years, the last fare increase for LRT-1 was in 2003. LRT-2's fares, on the other hand, have never been increased.
For MRT-3, not only have its fares never been increased, they were in fact lowered: from the original range of P 17.00 to P 34.00 in 1999, fares were decreased to P 12.00 to P 20.00 in 2000. Currently, it is lower at a range of P 10.00 to P15.00.
The DOTC said the failure to match fare adjustments with increasing operating costs have resulted in practically break-even finances for all three lines. In turn, this crippled the agency's ability to invest in large-scale improvements for its facilities, since revenues have only been enough for day-to-day operational requirements.
The fare increase is in line with the 2011-2016 Medium-Term Philippine Development Plan (PDP). The PDP directs the adoption of the "user-pays" principle in the pricing of transportation services.
Currently, LRT and MRT operations are subsidized by government in the amount of approximately P12 billion per year.
Under the "user-pays" principle, riders will shoulder more of the cost for their own trips. In the case of LRT and MRT, this will entail a shift from the current zonal fare scheme to a distance-based system. As such, riders will be charged based on the distance they travel.
Since government subsidizes around 60% of the cost for each LRT-1 and LRT-2 passenger and around 75% of each MRT-3 passenger, an estimated P2 billion will be freed up for development projects and relief operations in other parts of the country.
"We must emphasize that around P10 billion will still go to subsidizing LRT and MRT passengers. But the premise of the user-pays principle is this: if what each rider pays is closer to the actual cost of his or her own trip, the P 2 Billion savings can be used for development projects and relief operations to benefit those who never even get to use the LRT or MRT," Abaya explained.
"I'm referring to the vast majority of Filipinos outside of Metro Manila - those in other parts of Luzon, in the Visayas, and in Mindanao, most especially those whose lives have been severely affected by typhoons and calamities. They will be the real beneficiaries of a more equitable distribution of these savings," he added.
The projected P2 billion savings is equivalent to 8,240 classrooms, 82 kilometers worth of farm-to-market roads, or 11,440 hectares' worth of irrigated farmlands, the DOTC said.