SC declares valid fare increases for LRT, MRT

The Supreme Court (SC) has declared valid the 50 to 87 percent fare increases imposed in 2014 for passengers of Light Rail Transit (LRT) Lines 1 and 2, and Metro Rail Transit (MRT) Line 3. Under Department Order 2014-014, the then Department of Transportation and Communications, now Department of Transportation (DoTr), the increases were: LRT-1, from P12 to P20, to P15 to P30; for LRT-2, from P12 to P15 to P15 to P25; and for MRT-3, from P10 to P15 to P13 to P28. The Land Transportation Franchise Review Board (LTFRB) concurred in the adjusted fares before the issuance of the DOTC’s DO 2014-014 on Dec. 18, 2014. The fare increases prompted several groups to challenge the then DOTC’s order before the SC. In a decision written by Justice Jhosep Y. Lopez, the SC emphasized that fare increases for LRT and MRT require prior notice and hearing to be valid. A copy of the decision was not available at posting.  The SC’s public information office (PIO) issued a summary of the decision with assurance that a copy will be posted in the SC’s website – sc.judiciary.gov.ph – once available. Based on the PIO’s summary, the SC ruled that the fare increases imposed in 2014 substantially complied with the notice and hearing requirements. The SC said that the notice of public consultation on Jan 20 and 27, 2011 was published in two newspapers of general circulation. It said that on Feb. 4 and 5, 2011, the public consultations were held. In 2013, the DOTC published anew a notice for the public consultation scheduled on Dec. 12, 2013. After the consultation, the Light Rail Transit Authority (LRTA) board approved the fare adjustment, with the 20 percent student discount, which was concurred in by the LTFRB on April 20, 2011. However, on May 9, 2011, the LRTA board and the DOTC deferred the implementation of the fare increases. On June 26, 2013, the LRTA Board withdrew the 20 percent student discount. The petitions filed against the fare increases argued that the increases were issued without due notice and hearing. The petitioners also claimed that the DOTC lacks the power to implement a fare increase for the LRT and the MRT, as such power has been transferred to the LTFRB, and that D.O. 2014-014 was arbitrary, alleging that the 50 to 87 percent fare increase was without basis. In dismissing the petitions, the SC said that in the case of fixing rates which is considered a quasi-legislative function, the Administrative Code of 1987 expressly requires that there be prior notice and hearing in rate-fixing, with the notice to be published at least two weeks before the hearing. It said the then DOTC complied with the provisions of the Administrative Code as notices for public consultations were published and the consultations were held on Feb. 4 and 5, 2011, and on Dec. 12, 2013. It pointed out that while the fare increases took effect only on Dec. 20, 2014, the previous public consultations substantially serve the purpose of the hearing requirement under the law, as the proposed fare structure was retained and the original basis and purpose for the proposed hike remained the same. The SC also said that the requirement that all rates must be reasonable and just was complied with by DO 2014-014, which was a result of a thorough and independent evaluation made by the DOTC and the LRTA following the prescribed procedure in implementing the fare increase. Without a clear showing that the DOTC or the LTRA acted arbitrarily, their findings regarding the fare increases under D.O. 2014- 014 must be respected, the SC stressed.