Ralph Recto is right about MRT fare

Ralph Recto is right. P-Noy and DOTC Secretary Mar Roxas will have to think of a better excuse to raise MRT fares than to say that it is unfair to the provincianos. Conceptually, P-Noy and Mar are looking at total taxes collected nationwide when they make such policies like subsidizing anything. From that perspective, it does seem unfair that such a large sum of money is being lavished on a subsidy just for MRT riders.

According to P-Noy, nearly P7 billion in subsidy is given to the operations of MRT. He said the actual cost of operating the railway from Taft, Manila to North Avenue, Quezon City was P55 per passenger compared to the P15 being charged currently. According to ABS-CBN, P-Noy said the savings in MRT subsidy could be used to build mass transit systems in the provinces.

Teka muna. Outside of Cebu and possibly Davao, I can’t think of any other provincial area that needs mass transport systems similar to the MRT. Then again too, Ralph is correct when he said that “people in the provinces are not actually complaining nor up in arms over their supposed subsidy of MRT-LRT riders in Metro Manila…”

Recto, who chairs the tax making ways and means committee of the Senate, is right to point out that in fact, it’s the other way around since most of the taxes raised by the government are contributed by folks and industries in Metro Manila, which are then redistributed to the poor provinces. The MRT subsidy, Recto said, are in reality the same taxes paid by Metro Manila residents that are merely returned to them.

“No one in the provinces like in Batanes, Batangas or in Capiz, Tarlac and even in Tawi-Tawi is subsidizing a rider in Metro Manila. In fact, it’s Metro Manila that is subsidizing the P39.4-billion CCT program that would benefit most of the provinces,” Recto said, referring to the multi-billion conditional cash transfer (CCT) program of the government for 2012.

Recto cited figures to prove his point. Of the programmed tax revenues of P1.445 trillion in the 2012 budget, people in Luzon and, specifically those in the National Capital Region (NCR) will contribute a huge part of that. Recto noted that in 2010, Metro Manila cities of Quezon, Makati, Manila and Caloocan contributed P281.8 billion of the P337 billion that were collected from the 19 revenue regions of the Bureau of the Internal Revenue (BIR).

In fact, Recto observed, even the combined tax collections from Bicol provinces down to Tawi-Tawi only amounted to P56.2 billion – which is well below Quezon City’s collection of P75.8 billion. He further said the aggregate P23.5 billion taxes collected in five Mindanao revenue regions in one year only represented the eight-month collection performance of the City of Manila.

“And remember the LTS – Large Taxpayer Section – which collected P457 billion in 2010 is NCR-based and a great chunk of what it collects is attributable to income generated in Metro Manila,” Recto pointed out. Recto is correct… fair is fair.

Besides, Mar and even P-Noy must realize that in major cities of the world, governments do subsidize mass transport systems. It is a practical if not a very tangible public service. The absence of mass transit can only produce more problems for society ranging from inequality of social access to jobs or health consequences through pollution from all the motor vehicles tooling around. Also, lost national productivity due to traffic jams!

I also take the view that the MRT-LRT is one very tangible benefit received by the working middle class for the taxes they pay. I understand that most of the taxes collected still come from salaried employees, the type who would use the MRT. The MRT subsidy is as good a use of tax money as the CCT which subsidizes the poor for being poor.

If Mar wants to make a mark at DOTC, what he should be doing instead is to fast track proposals to build more MRTs to connect nearby provinces to Metro Manila. This will help decongest NCR. Workers can live outside the metro area but still be able to work in the city because there is fast and cheap transport available.

Mar the technocrat should not just look at the numbers his technocrat assistants show him. He must use his investment banking skills to see how to reduce the subsidy through other means like the commercial possibilities of the MRT route.

Ramon Ang once told me that he was bold enough to offer an unsolicited bid for the entire PNR line and of course, LRT 7 to San Jose del Monte Bulacan because he can make money with commercial operations along the route. There are of course advertising along the tracks and mini malls along the stops.

The problem of Mar is that the private sector proponents of MRT who have mostly sold out their interests took all those potential commercial possibilities for themselves and left government to subsidize the fare completely. Mar must now use his investment banking skills to figure a way out of the quagmire and wrest complete government control of the MRT including its commercial portions. That’s how to be creative and people oriented. Fares may be very gradually raised but only after Mar has shown he has exhausted all other avenues and this is the only way to go.

Or just let Manny Pangilinan’s group take over and leave them the problem of where to get the subsidy for the public fare. One thing is sure… it is untimely to raise fares at a time when the public has not seen any improvement in MRT services.

One more thing… subsidizing public transport is actually an accepted government policy or how would they explain Pantawid Pasada which subsidizes the diesel used by jeepney drivers? Is that just to keep them quiet? If MRT riders make noise, will the subsidy to their fare be okay?

Mar, the man who would be President, must prove he has what it takes to handle a problem though not simple, is not as complex as trying to run this country. –Boo Chanco (The Philippine Star)