Press Release
January 25, 2011


Amid plans to raise metro rail fares, Senator Chiz Escudero wants the Metro Rail Transit (MRT) and the Light Rail Transit (LRT) to submit to the Senate the full details and accounting of their revenue sharing from the advertisements and lease operations of the Metro Rail Transit Corporation (MRTC) and the Light Rail Transit Authority (LRTA).

Escudero, chairman of the Senate justice and human rights committee, said these non-rail revenues can be tapped to subsidize the fare increases the government was planning to implement.

"If only the government gets its full collectibles from non-rail revenues, pressure to raise fare levels would be unloaded off its shoulder. From the way it looks now, there is a dismal proportion in terms of revenue sharing realized from non-rail revenues between the government and the MRTC," Escudero said.

The MRTC, which operates the MRT, has been collecting and receiving income from ads and lease operations through its subsidiary, the MRT Development Corporation (MRTDevCo).

The MRTC, however, failed to settle its outstanding debt to the government, which now runs to more than P1 billion.

"While it is true that the government needs to look for viable measures to address the huge subsidy, it continuously shoulders the costs of our rail transport system, and raising fares should not be the first option," Escudero said. "We have existing options that are just waiting to be explored. In this case, non-rail revenues should be maximized and utilized for fare subsidies.

Based on a study by the Philippine Institute for Development Studies, the government at present subsidizes the fare of each commuter at P95.00 per day, or an annual subsidy of P23, 850 per rider.

The senator said the country should already be implementing what all rails in the world are doing: using non-rail revenues to subsidize fares.

A Japan Bank for International Cooperation study conducted in 2007 showed that non-rail revenues of MRT and LRT can still be improved by increasing the advertising rates and the retail tenant leased areas to deflect the fare hikes.

LRT's non-rail revenue share is only 2.6 percent of the total earnings. Whereas in neighboring countries, their light rail systems get more than 20 percent of the non-rail revenues.

Escudero has been pushing for a congressional inquiry to determine ownership and full operational control of MRT 3 so that proper steps could be taken on how to deal with fare subsidies, among others.

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