Gov't to shoulder MRT
fare at P48 per commuter
QUEZON CITY Ė
The national government will spend a total of P7.3 billion next year
to subsidize the fare of Metro Rail Transit (MRT) commuters at a rate
of P47.77 each, House Deputy Majority Leader Roman Romulo said over
Romulo said the
amount, contained in the proposed 2011 national budget, is P2.2
billion or 43 percent greater than the State's P5.1 billion "fare
subsidy" to MRT commuters this year.
Romulo, who represents
the lone district of
in Congress, favors the sustained fare aid.
"Our sense is, the
subsidy is fair and reasonable, based on the principle that those who
have less wherewithal are entitled to more support from the State,"
"The only other option
is to raise fares and take an equal amount, or P7.3 billion, out of
the pockets of MRT commuters, mostly salaried employees and wage
earners, plus some students, that deserve the subsidy," he pointed
"Offhand, a 50 percent
reduction in the subsidy would imply a fare increase of P23.88, which
is definitely burdensome to commuters," he added.
Romulo cautioned the
Department of Finance (DOF) and the Department of Budget and
Management (DBM) against allowing a large subsidy withdrawal and a
corresponding significant fare increase.
earlier said they are "in the process of striking a balance" between
lower subsidy and higher fares.
Romulo, however, said
a substantial increase in MRT fares might be counterproductive, "since
this could possibly drive away cost-sensitive commuters, thus implying
potential revenue erosion."
"This might force
government to later come in and cover the revenue shortfall anyway,"
The DOF has also said
that maintaining the subsidy to MRT commuters would be "unfair" to
taxpayers in the Visayas and
Mindanao, who do not benefit from the train.
"In that case, the
remedy is not to deprive MRT commuters of subsidy, but to augment
infrastructure and other forms of public spending that would benefit
people in the Visayas and Mindanao," Romulo said.
The MRT spends around
P64 to move each commuter. But since the MRT charges only an average
of P14.50 per commuter, government has to pay for the balance,
including the train's maintenance and operating costs.
Besides the P7.3
billion fare subsidy, government is coughing up another P1 billion to
cover the MRT's operating and maintenance costs in 2011, up from this
year's P645 million.
The MRT was built by a
private consortium on an assured 15 percent annual rate of return,
plus debt obligations that are ultimately guaranteed by the State.