LRTA borrowing P3 billion to pay off LRT-1 obligations

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February 23, 2026 | 12:00am

MANILA, Philippines — The Light Rail Transit Authority (LRTA), the state-run regulator of the Light Rail Transit Line 1 (LRT-1) is seeking a P3-billion loan from the Land Bank of the Philippines to  settle  its remaining obligations to its private partner.

LRTA is waiting for Landbank to approve its P3-billion loan, filed in 2025, to settle the remaining claims of LRT-1 operator Light Rail Manila Corp. (LRMC).

LRTA administrator Hernando Cabrera said the agency is starting to reimburse LRMC for some of its claims, marking the first time in three administrations the government is doing so.

Cabrera said LRMC is asking the government to pay around P4 billion in claims, covering fare deficit and infrastructure spending. Last year, the LRTA settled P406.03 million of that amount, sourcing the payment from its own savings.

Afterward, the LRTA received nearly P500 million from the government to settle another tranche in LRMC’s claims. To date, the LRTA has coughed up more than P900 million to LRMC, and intends to cover the remaining P3 billion soon.

The final P3-billion obligation covers the fare deficit, or the amount LRMC was supposed to earn had the government approved previous petitions for a rate hike.

Under the concession agreement signed in 2015, LRMC is tasked to invest up to P64.9 billion for the operations and maintenance of the LRT-1.

Further, LRMC must complete the LRT-1 Cavite Extension Project that would expand the line to Bacoor, cutting the travel time between Pasay City and Cavite to just 25 minutes.

In 2024, LRMC finished the first phase of the extension, adding five stations to the LRT-1. At present, it is waiting for the LRTA to finish the acquisition of right of way for the remaining parts of the project.

In exchange, LRMC is allowed to seek a fare hike once every two years to recoup investments. However, the concessionaire has been denied fare adjustments several times since 2016, with the Department of Transportation prioritizing the welfare of commuters.

This made it difficult for shareholders to stick it out with LRMC, and some of them, including its largest owner Metro Pacific Investments Corp., is now considering exiting the LRT-1 business.

Prior to this, the Ayala Group had announced its plan to sell its 35-percent stake in LRMC as part of efforts to reorganize its business portfolio.