I am recently disturbed by the pronouncement by DOTC Sec. Jose "Ping" De Jesus that a hike in the fare rates of the MRT and the LRT is inevitable, just because the government is losing an estimate of P7 billion a year in maintaining the operations of this form of mass transport. Let me remind them that the MASS TRANSPORT SYSTEM is a PUBLIC GOOD.
A characteristic of a PUBLIC GOOD is that it is non-rivalrous and non-excludable. The mass transport system that we currently have right now is essential to this economy, and perhaps, the only direct public service benefit for everyone, not just for the rich or poor, that augments for the small minimum wage, high taxes and pricy commodities in the market.
If this administration were to hike up the fare in the MRT/LRT, there will be so many negative externalities it would cause not only to our consumers, but to business in general. If we were to analyze, the only reason why government is doing so is because it is losing a lot of money.
It has an indirect effect in the prices of basic commodities, the demand to increase wages, and also perception of the international community, particularly foreign investors, of the high cost of mass transport in the country.
My question is, first, why does government subsidize for power and the ERC allow power rates to increase if it was the fault of companies like Meralco that they incur operational losses? One, it is Meralco's responsibility to go after houses that use jumpers, and its failure to exercise its authority on its own business leads to passing on of additional charges to customers who have faithfully obliged to their duties of paying their electricity bills. Government must make power companies like Meralco accountable to its own misgivings, and must not allow them to continuously pass on the burden of paying its operational losses to the general consumer base.
Why did I mention such? Because Government subsidizes for P13 billion in power rates, double than what it does for the mass transport system rates. The government must exercise its power by making companies like Meralco accountable to its own operational losses, and prohibit these companies from perpetually increasing the rates of electricity in households. Under that suggestion, a stiffer punishment for illegal tapping of electricity (use of jumpers) must be put in place, to discourage people from committing those offenses. In turn, Meralco must have the capacity to oversee its operations and significantly reduce the cost of electricity once a negative balance does not show up in terms of operational expenses.
If we were to re-channel half of that towards filling up the losses incurred by the mass transport system, then the problem would have been solved, rather than passing on the burden again directly to its general public.
Another source to downsize the gap is for state to impose more taxes to fund the operation of a public good, such as the mass transport system. This is where tax collection efficiency must be improved, and introduction of new tax schemes can be further looked upon.
The reality is we are a developing country, and most of our people are cash strapped and the alternative of using private transport like buying cars, automobiles is not a priority, especially if people cannot even afford to eat three times a day. The Aquino administration has to be more dynamic in plugging the gaps, instead of always resorting to strategies of passing on the burden of paying deficits to consumers.
There should be constant communication between the DBM, Customs, BIR and the MRT/LRT Management Group in finding ways and means to consider increasing the price of fares as the court of last resort. They have to institutionalize a mechanism of dialogue, most especially, if they so decide to increase, so that all stakeholders can have their inputs, especially that the decision to be rendered involves a public good.
Mass transport, such as the MRT/LRT, is a public good, and it is a direct benefit to all classes, without discrimination for rich or poor. Thus, a significant increase or decrease in its availability poses an impact to their capacity to consume and avail of basic goods and services.
A characteristic of a PUBLIC GOOD is that it is non-rivalrous and non-excludable. The mass transport system that we currently have right now is essential to this economy, and perhaps, the only direct public service benefit for everyone, not just for the rich or poor, that augments for the small minimum wage, high taxes and pricy commodities in the market.
If this administration were to hike up the fare in the MRT/LRT, there will be so many negative externalities it would cause not only to our consumers, but to business in general. If we were to analyze, the only reason why government is doing so is because it is losing a lot of money.
It has an indirect effect in the prices of basic commodities, the demand to increase wages, and also perception of the international community, particularly foreign investors, of the high cost of mass transport in the country.
My question is, first, why does government subsidize for power and the ERC allow power rates to increase if it was the fault of companies like Meralco that they incur operational losses? One, it is Meralco's responsibility to go after houses that use jumpers, and its failure to exercise its authority on its own business leads to passing on of additional charges to customers who have faithfully obliged to their duties of paying their electricity bills. Government must make power companies like Meralco accountable to its own misgivings, and must not allow them to continuously pass on the burden of paying its operational losses to the general consumer base.
Why did I mention such? Because Government subsidizes for P13 billion in power rates, double than what it does for the mass transport system rates. The government must exercise its power by making companies like Meralco accountable to its own operational losses, and prohibit these companies from perpetually increasing the rates of electricity in households. Under that suggestion, a stiffer punishment for illegal tapping of electricity (use of jumpers) must be put in place, to discourage people from committing those offenses. In turn, Meralco must have the capacity to oversee its operations and significantly reduce the cost of electricity once a negative balance does not show up in terms of operational expenses.
If we were to re-channel half of that towards filling up the losses incurred by the mass transport system, then the problem would have been solved, rather than passing on the burden again directly to its general public.
Another source to downsize the gap is for state to impose more taxes to fund the operation of a public good, such as the mass transport system. This is where tax collection efficiency must be improved, and introduction of new tax schemes can be further looked upon.
The reality is we are a developing country, and most of our people are cash strapped and the alternative of using private transport like buying cars, automobiles is not a priority, especially if people cannot even afford to eat three times a day. The Aquino administration has to be more dynamic in plugging the gaps, instead of always resorting to strategies of passing on the burden of paying deficits to consumers.
There should be constant communication between the DBM, Customs, BIR and the MRT/LRT Management Group in finding ways and means to consider increasing the price of fares as the court of last resort. They have to institutionalize a mechanism of dialogue, most especially, if they so decide to increase, so that all stakeholders can have their inputs, especially that the decision to be rendered involves a public good.
Mass transport, such as the MRT/LRT, is a public good, and it is a direct benefit to all classes, without discrimination for rich or poor. Thus, a significant increase or decrease in its availability poses an impact to their capacity to consume and avail of basic goods and services.
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