The Light Rail Transit Authority (LRTA) is seeking a P3-billion loan from Land Bank of the Philippines to settle its remaining financial obligations to Light Rail Manila Corp. (LRMC), the private operator of LRT Line 1.
LRTA administrator Hernando Cabrera said the loan proceeds will be used to pay off the government’s outstanding balance to LRMC. The agency has already paid P926 million out of about P4 billion in claims, using internal savings and support from the national government.
Cabrera said completing the payments would demonstrate the government’s commitment to honoring public-private partnership (PPP) contracts, a key signal to current and prospective infrastructure investors.
The unsettled obligations had earlier prompted Manuel V. Pangilinan, chairman of LRMC and Metro Pacific Investments Corp., to consider divesting his stake in the railway operator, citing continued financial losses and delayed fare adjustments. From 2016 to 2020, LRMC did not receive the automatic biennial fare increases provided under its concession agreement. Fare hikes were approved only during the administration of Ferdinand Marcos Jr..
LRMC took over LRT-1 operations in September 2015 and won the contract for the 11.7-kilometer Cavite Extension. The line runs from Baclaran in Pasay City to Muñoz in Quezon City.
Despite past financial strains, LRMC management said operations are improving. Ridership has returned to pre-pandemic levels of about 440,000 passengers daily and is projected to reach 450,000 by year-end. The company has implemented system upgrades, including station rehabilitations, new fourth-generation train sets, and the first phase of the Cavite Extension.
Commercially, settling the debt could stabilize LRMC’s financial position, reduce investor uncertainty, and support continued capital spending on modernization and expansion. Operationally, it may help ensure sustained service improvements and capacity upgrades as commuter volumes recover.
