MANILA, Philippines - The Department of Budget and Management (DBM) has allocated P7.3 billion to subsidize the fares of the Metro Railway Transit (MRT) passengers for next year.
Budget Secretary Florencio Abad said the subsidy increased by around P1.6 billion from P5.7 billion this year. This runs contrary to an earlier pronouncement of the Aquino administration that it will stop subsidizing the operations of MRT and instead increase the fares of commuters to enable the government to stop the rising budget deficit.
Abad said the P7.3-billion subsidy would translate into around P44 per passenger. He noted the average cost of servicing one passenger is around P60 but MRT fares average around P14.5, “so there is a big difference that the government has to subsidize.”
Abad said “there is room for adjustment” since passengers in air-conditioned buses and FX taxis usually pay P20 to P25 each.
The DBM is also setting aside about P1 billion for the operation and maintenance of the MRT for financial year 2011. In 2010, the budget allocation for this was P645 million.
The issue cropped up Monday as the Senate started scrutinizing the proposed P1.645-trillion budget presented by the DBM and the rest of President Aquino’s economic team to the chamber.
Abad said the proposed budget level for 2011 is a modest increase of 6.8 percent over the 2010 budget of P1.54-trilllion. The 2011 budget represents 18.2 percent of the gross domestic product, slightly lower than the 18.5-percent share for this year.
Subsidy ‘too high’
Former Senate finance committee chairman Sen. Edgardo Angara said the proposed subsidy, which he described as “too high,” has left government banks on the losing end. He said the Development Bank of the Philippines and the Land Bank of the Philippines have sunk nearly P300 billion over the years into subsidizing the MRT and the Light Railway Transit (LRT).
Angara said the government has to act because it cannot go on subsidizing the LRT and MRT operations every year.
“Can you maintain an P8-billion subsidy every year? For how long? Operating costs will go up… you have to let passengers pay their share of the costs,” he said.
He said the government can use the P7 billion to P8 billion to improve food production and agriculture.
The entire proposed budget for MRT for 2011 is P8.29 billion, a big leap from the P5.7 billion under the 2010 budget.
The Aquino administration has also increased from P748 million to P4.246 billion the allocation for LRT south and north extension projects.
Asked if the MRT fares will still increase, Abad said it remains under review.
Group calls for probe of MRT deals
The Riles Laan sa Sambayanan (Riles) network, a rail commuters’ group, called on Malacañang to probe the contracts for the construction and operation of the MRT before pushing for a proposal to hike fares at the EDSA-bound rail line.
Riles spokesman Sammy Malunes said finding the scrapping or renegotiating the onerous provisions in these contracts should be the priority.
“Abad is wrong in insisting… that the public shoulder the burden of sustaining the MRT. Train systems should be intended for social service, for the full benefit of the public and under full support by the government,” he said. Malunes said the “investors, operators, and lenders for the train project belong to the same owners or group of companies. This is what Abad and the lawmakers should look into first.”
Riles opposes the proposed fare hike and privatization of the MRT, saying a minimum
