Single contract eyed for LRT-1, MRT-3

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January 19, 2026 | 12:00am

For investment viability

MANILA, Philippines —   The country’s busiest railways – Metro Rail Transit Line 3 (MRT-3) and Light Rail Transit Line 1 (LRT-1) – could end up being managed by a single group eyeing to operate train services jointly to make them profitable assets. With tycoons planning to leave the LRT-1 business, the Department of Transportation (DOTr) is looking for creative ways to improve the financial prospects of investing in the rail sector.

The DOTr is reviewing the public-private partnership (PPP) model for rail projects to prevent a repeat of struggles faced by LRT-1 operator Light Rail Manila Corp. (LRMC).

The DOTr is willing to package the concession agreements for the MRT-3 and LRT-1 into one.

Acting Transportation Secretary Giovanni Lopez said a private group is now coming up with an unsolicited proposal to operate the two railways.

Originally, the DOTr had wanted a single operator for the MRT-3 and the Recto-Antipolo railway of Light Rail Transit Line 2. However, that plan was abandoned, primarily because the two lines cater to different markets.

“The MRT-3, along with the LRT-1, is intended to be covered in an unsolicited (proposal) being developed by a certain group,” Lopez told The STAR.

Lopez declined to identify the private group planning to consolidate the MRT-3 and LRT-1, but he confirmed that it is already in the business of rail operations.

Placing the MRT-3 and LRT-1 under one manager could really make sense, especially as the two lines meet in EDSA and will be connected further in 2027 by the Unified Grand Central Station.

Further, the two railways ferry the most volume of passengers in Metro Manila, with the MRT-3 serving about 388,000 commuters daily in 2025. Latest available data showed the LRT-1 serving nearly 324,000 per day as of 2024.

Still, the most important thing for the DOTr right now is to show that Philippine railways can be viable PPPs. Union Bank of the Philippines chief economist Ruben Asuncion said the DOTr has to innovate fresh ways to raise investment appetite for railways.

In particular, the DOTr has to address concerns that railways are bad for business, aggravated by the recent plan of the Metro Pacific Investments Corp. (MPIC) to exit LRT-1 operator LRMC.

LRMC, owned largely by MPIC at 35.8 percent, saw its losses balloon to P828 million in 2024, largely because the DOTr junked its previous petitions for fare hikes.

Prior to the recent fare increase in 2025, LRMC had piled up a deficit of P2.17 billion, summing up the cost of denied petitions since 2016.

As such, Asuncion said the DOTr can improve the PPP environment for railways by upholding the fare mechanism stipulated in the concession. LRMC, for instance, is authorized to demand a fare hike once every two years to recover investments.

Asuncion asked the DOTr to fulfill government obligations in rail expansion by expediting right of way (ROW) acquisition to minimize delays. In the LRT-1, the second and third phases of the Cavite line have yet to begin construction in the absence of a complete ROW.

“The lessons from the LRT-1 concession highlight the need for predictable regulatory execution, while global best practices, including in output-based frameworks, show how clear performance incentives and lifecycle planning improve service outcomes,” Asuncion told The STAR.