SC affirms validity of LRT, MRT fare increase enforced in 2015
The Supreme Court (SC) has affirmed the validity of the fare increase ordered in late 2014 by the Department of Transportation and Communications (DOTC), now Department of Transportation (DOTr), on the lines serviced by the Light Rail Transit (LRT) and the Metro Rail Transit (MRT).
The rate increase – P11 base fare plus P1 per kilometer thereafter – under DOTC Order No. 2014-014 dated Dec. 18, 2014 was enforced on Jan. 4, 2015.
DOTC Order No. 2014-014 mandated the “distance-based fare scheme using the P11 base fare plus an additional P1 per kilometer thereafter in accordance with the board resolution of the Light Rail Transit Authority (LRTA) with concurrence of the Land Transportation Franchising Regulatory Board (LTFRB) and the recommendation of the MRT-3 Office.”
Initially, two petitions were filed against the rate increase before the SC. Later, three more petitions were filed. All petitions claimed the rate increase was “arbitrary and oppressive,” and issued without notice and hearings.
The petitioners, mostly legislators at the time of the filing of their petitions and labor groups and unions, were the late Augusto L. Syjuco Jr., Bagong Alyansang Makabayan, United Filipino Consumers and Commuters, Inc., Bayan Muna, and a group led by Sen. Joseph Victor G. Ejercito.
Among those named as respondents were the then DOTC secretary Jose Emilio A. Abaya, Officer-in-Charge of MRT-3 Renato Z. San Jose, Light Rail Transit Authority (LRTA) Administrator Honorito D. Chaneco, the Metro Rail Transit Corporation, and the Light Rail Manila Consortium (LRMC).
All the petitions sought the issuance of a temporary restraining order (TRO) that could have prevented the enforcement of the rate increase. The SC, however, did not issue a TRO.
Almost all the petitions claimed: “The collection of increased fare rates, imposed without due notice and hearing, and by the DOTC which has no regulatory jurisdiction over the MRT and LRT, constitutes an unjust taking of property from the public. It is estimated that the increase costs the public about P 10 to 13 million every day, an amount that the government may find negligible but unaffordable and oppressive for the poor riding public.”
Citing examples of the increased rates at the time the petitions were filed, the SC was told that an MRT-3 trip from North Avenue in Quezon City to Taft Avenue in Manila starting Jan. 4, 2025 costs P28 pesos from the original P15; an LRT-1 trip from Roosevelt Avenue in Quezon City to Baclaran in Paranaque Cty is now P30 from P20; and an LRT-2 trip from CM Recto in Manila to Santolan Road in Quezon City is now P25 from the original P15.
The Office of the President in 2015 declared that the fare increase would not be rolled back since the money that would be generated would boost finances and improve Metro Manila’s public transport system.
The Department of Finance (DOF) then pointed out that in MRT-3 alone, the national government is poised to generate at least P3 billion in savings, which will be realigned for the improvement and maintenance of the problematic train system.
“The government will continue to infuse billions of pesos in subsidies into MRT-3 and other rail systems in Metro Manila. The implementation of this long-delayed fare hike will just soften government burden,” the DOF said.
After citing previous rulings on similar issues, the SC – in a full court decision written by Associate Justice Jhosep Y. Lopez – said:
“In the present case, petitioners failed to prove that the rates under D.0. No. 2014-014 were unreasonable or unjust. To note, the proposed fare increase of P11 plus P1 per kilometer was initially determined by the DOTC-LRTA Study Team in 2010 after conducting an examination of the various factors affecting the operations and status of the rail lines.
“According to the team's Fare Restructuring Executive Report, the rail lines are not generating substantial revenues, requiring greater government subsidies to cover operating and maintenance costs. It was also pointed out that the LRT and MRT fares have fallen below the fare levels of Metro Manila buses and jeepneys for the end-to-end travel of the rail lines.
“Thus, three fare options were initially considered to approximate the prevailing fare of air-conditioned buses in the metro: (1) P 9 [boarding fee] plus P1 per kilometer; (2) P10 [boarding fee] plus P1 per kilometer; and (3) P11 [boarding fee] plus P1 per kilometer.
“Ultimately, the team proposed the increase of P11 plus P1 per kilometer since it will reduce government subsidy the most.
“From the foregoing, it cannot be said that the fare increase under D.O. No. 2014-014 was arrived at arbitrarily. Clearly, the rates thereunder were determined after a thorough and independent evaluation made by the DOTC and the LRTA. Moreover, the DOTC and the LRTA followed the prescribed procedure in implementing the fare increase.
“As discussed above, due notice was issued and public consultations were held before D.O. No. 2014-014 took effect.
“Without a clear showing that the DOTC or the LRTA acted arbitrarily or capriciously, this Court shall not interfere in the exercise of their statutorily-granted powers. Their findings and conclusions with regard to the fare increase under D.O. No. 2014-014 must thus be respected.
“This Court reiterates that with regard to any changes in the rates of the LRT and the MRT fares, the requirements under Section 9, Chapter 2, Book VII of the Administrative Code of 1987 must be strictly observed. The twin requirements on notice and hearing are not dispensable. Otherwise, any proposed changes or fare increase shall be void and of no effect.
“In this case, there was substantial compliance with the requirements of notice and hearing. The purpose for which these requirements were enacted was sufficiently served. Perforce, the validity of D.O. No. 2014-014 must be sustained.
“As a final note, this Court clarifies that the result of the pending arbitration request filed by the LRMC with the International Chamber of Commerce on May 6, 2022 against the DOTr and the LRTA will have no effect on our ruling on the consolidated Petitions. The arbitration request involves the petition for fare increase in 2016, 2018, and 2022 made by the LRMC which were all denied by the government. It does not deal with the fare increase mandated under D.O. 2014-014.
“Accordingly, the Petitions are dismissed. This Court upholds the validity of the Department of Transportation and Communications Department Order No. 2014-014. So ordered.”