Government raises 2011 MRT fare subsidy to P7.3-B
MANILA, Philippines - The national government will hike its 2011 subsidy for commuters of the Metro Rail Transit (MRT) to P7.3 billion.
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House Deputy Majority Leader Roman Romulo said the amount will translate into a subsidized rate of P47.77 each per commuter.
Romula said the amount, contained in the proposed 2011 national budget, is P2.2 billion or 43% higher than the state's P5.1 billion fare subsidy to MRT commuters this year.
Romulo, a representative of the lone district of Pasig City, 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," Romulo said.
"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 out.
Romulo said that a 50% reduction in the subsidy would imply a fare hike 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.
Both departments 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."
The DOF said earlier 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, the 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% annual rate of return, plus debt obligations that are ultimately guaranteed by the state.
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subsidies subsidies subsidies
The more I hear and read the more I think we've become a socialist country destined to accumulate so much debt that we, as a country, will go broke. We no doubt borrow to subsidize MRT/LRT, and we just borrowed 400 million dollars to give to the poor families on a monthly basis to keep their kids in school. And the government just floated a billion dollars in bonds (read debt) for I guess more subsidizes. Sometime in the very near future we will beg the rest of the world to FORGIVE our debt. We are such a hopless lot really. It's better to spend money to control our overgrowing population. And if the church doesn't like this idea, IT should out its money where its mouth is and subsidize the poor (which is the basis of its survival) ITSELF. I don't see why I as a personal and corporate taxpayer should foot the bill for other peoples and government financial and social IRRESPONSIBILITY!!!
correct me if I'm wrong
"House Deputy Majority Leader Roman Romulo said the amount will translate into a subsidized rate of P47.77 each per commuter"
and since the fare of mrt/lrt ranges from 10 - 15 pesos ( distance-based fare structure) then this translate that the commuters are being paid (free) by 32.77 pesos to ride the mrt. UNBELIEVABLE! 42.77 - 15 = 32.77 PESOS.
Now this is what you call @!$@ and I'm not surprise why people in Visaya's or Mindanao is complaining about this use of taxpayers money, since they're not benefitting the use MRT/LRT.