It was once told that Erap Estrada was going to repeal the law of supply and demand. This would be equivalent to saying that Erap would repeal the law of gravity. And yet today, it’s not only Erap who falls into this absurdity – but millions of Filipinos as well.
Whether it’s electricity, education, health care, transportation, security – Filipinos continue to believe in strong state intervention. Obviously, that has not really turned out so well for Venezuela where people have to form a line just to get a bar of soap. And that’s against a backdrop of empty shelves.
But I digress.
Opposition to the Rate Hike and the Greed Fallacy
The central argument of the MRT boils down to this – the riding public believe that a price hike is not necessary because of technical and operational flaws in the rail system.
In effect the public is saying:
1) They are not willing to pay for improvements to the technical and operational flaws.
2) They are willing to put up with technical and operational flaws, for as long as the cheap rate is kept.
Apparently, pinoys think that removing the technical and operational flaws do not come with a cost – and these are for “free”.
Here’s the thing, Filipinos complain about the flaws – but they don’t want it fixed – if they are paying for it.
This is best expressed by leftist Bayan Muna defacto “lawmakers” Neri Colmenares and Carlos Zarate also stated that “We are not against development or the extension of the rail systems but we are against passing government irresponsibility and corporate greed not to mention corrupt practices onto hapless commuters,” explained Colmenares.
What’s more glaring however are the statements of the leftists that they recognize the need to put money into removing the technical and operational flaws – for as long as the “hapless” commuters don’t pay for it.
Then WHO will be paying for it? The unaware taxpayers who don’t ride the MRT, that’s who!
Certainly – there is government irresponsibility and greed involved. But the constitutionally protected Filipino-owned corporate cronies are not only the parties to greed.
It also includes those MRT users who think that non-MRT users should keep on subsidizing their fare – for short, the so-called “hapless” commuters are as greedy and as irresponsible as government and its cronies.
To Filipinos it is not greed to want to take the money of the non-MRT riding public so that MRT riders can keep on paying low fares. Now isn’t that rich?
Advocates of the Rate Hike
The defacto Aquino regime however argues that it is necessary and that the prices are reasonable.
The defacto Presidential Communications Operations Office (PCOO) Secretary Herminio Coloma Jr. stressed that the “minimal” fare hike in the LRT and MRT3 systems will result to reduced government subsidy and the funds saved will instead be used to finance “important” social services.
The Aquino regime argued that the true cost of a whole trip on the MRT is P60, and on the LRT it’s P40. Yet, commuters using MRT-3 pay P15 for a one-way trip along the entire line from Taft Avenue in Pasay City to North Avenue in Quezon City.The same fare is charged by LRT-1, which connects Baclaran in southern Metro Manila to Roosevelt Avenue in Quezon City.
Hence, a P45 subsidy is provided for each commuter using MRT-3 while a P25 subsidy is provided for each commuter using the LRT-1 line.
Clearly, the LRT and MRT fares are artificially low because the operations are subsidized by non-MRT users – practically all Filipinos who pay any form of direct or indirect taxes (VAT for example).
Note that the spending was not reduced – it was merely reallocated or split into subsidies to the LRT and MRT and subsidies to other “social” services.
Nationalizing the MRT is a step backwards
I often hear people call for nationalizing the MRT. That my friends is an MRT subsidy on steroids. We have already seen the outcomes of how electricity, telecom, water were like under government agencies.
Privatization without liberalization however merely tranfers the inefficient monopoly of government – to a private monopoly protected by government.
Public private partnerships are even worse as these marry the worst features of monopolies – which always end up in high fees for crappy services.
The Elephant in the Room: The Failure of Government-Run Natural Monopoly
Where most Filipinos prefer that government set the prices in cahoots with government cronies, I prefer that the market set the prices based on supply and demand – and not what’s politically expedient.
One argument against the MRT fare hike is that people are already hard up and can’t afford the rate hike.
The answer to this is not a cap on rates – rather it is a multifaceted solution which has as its underlying structure – a functioning market, a market that allows suppliers and buyers of services to interact freely without interference from government.
How exactly?
1 – A market-oriented solution increases the wages of consumers due to the influx of better paying jobs. With higher wages, the MRT rate hikes will no longer be in the realm of unaffordable – and become very affordable.
2 – A market-oriented solution increases the number of able service providers. It removes the limitations that only allow Filipino majority owned firms to participate but one that treats foreign firms equally like Filipino owned firms.
3 – A market oriented solution eliminates the government from the actual ownership and operations of the services – and instead lets private firms compete in providing value to the riding public. Commuters who are not happy with one provider have the option of switching to other providers.
4 – A market oriented solution eliminates the regulatory hurdles in rolling out alternative routes. These allows firms to respond to market demand instead of building routes that are closer to a lawmaker or cronies real estate investments.
Epilogue
Filipinos have been so used to looking at government as the only solution. Obviously that has not worked for them and yet they still insist on solutions that are reminiscent of failed Soviet-style central economic planning.
While Russia and China have reduced poverty in the former Commie states by harnessing the power of markets of the 21st century – Filipinos cling to the failed policies of the Soviet era. At worst, Filipinos are mired in economic policies which range from socialist to corporatist/fascist.
As to when Filipinos realize the power of markets? They will just probably line up for jobs and eat the dust of Singaporeans, Hong Kongese, Vietnamese, Thais, Indonesians, and Malaysians. Taking selfies in the latest innovations to show home – where Pinoy barbarians and Pinoy Pride nazis are constitutionally walled up against civilization and the rest of humanity.
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