MANILA, Philippines - Even with P2 billion in projected additional revenue from fare increases for the Metro Rail Transit (MRT) and Light Railway Transit (LRT), the elevated railways will still not be able to live up to the expectations of the riding public, the Department of Transportation and Communications (DOTC) admitted yesterday.
The additional revenue is “not sufficient to keep the train systems operating up to their optimal capacity,” DOTC Undersecretary Rene Limcaoco said during a hearing of the Senate committee on public services.
He said the fare increase implemented at the start of the year would generate an additional P942 million for LRT Lines 1 and 2 and P1.1 billion for the MRT Line 3 (MRT-3).
The fare increase caught commuters and even legislators by surprise because there appeared to be no public consultation conducted on the matter and the announcement was made during the Christmas break.
From 2002 to 2014, Limcaoco said the MRT-3 earned P24.9 billion but generated expenses of P120.3 billion. The government covered the resulting P95-billion deficit with subsidies.
According to Limcaoco, one of the reasons for the fare increase is to free up government resources for priority projects in the Visayas and Mindanao.
Questions raised
Sen. Grace Poe, who headed the hearing yesterday, and Sen. Francis Escudero questioned why the DOTC never mentioned anything about the fare increase when it was defending its proposed budget for 2015 before Congress last year.
Poe asked DOTC Secretary Joseph Emilio Abaya why the fare increase was never raised during the hearings and why he did not just ask for more funding for the MRT-3 and the two LRT lines.
Abaya said that it was never his intention to “ask for the moon” when he appeared before Congress during the budget deliberations and so he just asked for something that was more “realistic” so that it would be approved.
Escudero, the chairman of the Senate committee on finance, said that if Abaya disclosed to the senators that the DOTC would be generating an additional P2 billion, they would not have given the agency as much as it was given in this year’s budget.
Sole authority to OK fare hikes
It was also revealed by Abaya that he had the sole authority to approve fare hikes for the three train systems as provided for in Executive Order 125-a issued by the late former President Corazon Aquino in April 1987.
Abaya said that he would never use that power whimsically and that all the proper procedures were taken prior to the approval of the fare hike for the three train lines.
Based on the timeline provided by the DOTC, public consultations for the fare hike were held in November 2011and Dec. 12, 2013.
The LRT Authority board approved the fare adjustment on June 26, 2013, subject to public consultations.
On Dec. 17, 2013, the LRTA board confirmed the fare adjustment and on Dec. 18, 2014, the DOTC issued the order for its implementation.
Timing
Both Poe and Escudero questioned the timing of the order and its publication, both of which were done on Dec. 18 last year, when most offices were already closed or very busy because of the holidays.
It was also done after the budget hearings at the Senate and when Congress was adjourning its sessions for the Christmas break so there was no way for the legislators to question this.
Abaya said that it was never his intention to hide the fare hike from the public and noted that the Department of Finance and the National Economic and Development Authority both gave him their support.
He said that it was the right thing to do so he decided to do it now instead of leaving the matter up to his successor in the next administration.
Escudero said he did not buy this explanation by Abaya and argued that if he thought it was the right thing to do then he should have just implemented the fare hike as soon as he took the helm at the DOTC.