November 13, 2025 | 12:00am
As investors mull LRT-1 exit
MANILA, Philippines — As the Metro Pacific Group considers a possible exit from the light rail business, the government is confident public-private partnership (PPP) interest in big-ticket projects would remain, noting that dozens of investors are already eyeing to bid for future concessions.
Acting Transportation Secretary Giovanni Lopez yesterday said efforts are underway to enforce the provisions of the concession for the Light Rail Transit Line 1 (LRT-1).
LRT-1 is operated and maintained by Light Rail Manila Corp. (LRMC), which is largely owned by the Metro Pacific Investments Corp. (MPIC) through its 35.8-percent stake.
Recently, MPIC has disclosed plans to divest its ownership in LRMC. MPIC chairman, president and CEO Manuel V. Pangilinan said investors are asking him why they are keeping LRMC in the portfolio when it has been only losing money.
To this, Lopez said the Department of Transportation (DOTr) is working with LRMC in ensuring the business viability of the LRT-1 by executing the provisions of their concession. The DOTr is monitoring if LRMC is complying with its responsibilities as concessionaire.
“The DOTr is already working closely with the concessionaire and its stockholders, including the MVP and Ayala Groups, to ensure the terms of the concession are observed; that concessionaire is able to continue deliver quality services to passengers; and that the LRT-1 extension to Cavite is completed,” Lopez told The STAR.
To prevent a repeat of this dilemma in future PPPs, Lopez said the DOTr has taken steps to come up with concession frameworks that would improve the business viability of railways.
For one, the DOTr is working with the Asian Development Bank (ADB) and the World Bank’s International Finance Corp. (IFC) in developing the contracts for rail PPPs.
For the North-South Commuter Railway (NSCR), the country’s largest infrastructure project, the DOTr gathered a total of 92 participants in roadshows organized in Singapore, Paris, Tokyo and Manila. Lopez said this is proof of investor interest in the country’s rail pipeline.
Similarly, the DOTr has so far received 17 investors in the roadshows for the private takeover of the Light Rail Transit Line 2. Lopez said the operations and maintenance of the line is scheduled to be bid out in 2026.
“For example, we are already seeing a high level of participation in the NSCR’s [operations and maintenance] PPP, which we expect to continue seeing in other upcoming railway PPPs,” Lopez said.
However, it is no secret that one of the reasons LRMC is bleeding is because it has yet to recover the investments it poured into operating and maintaining LRT-1.
Under the concession signed with the DOTr in 2014, LRMC is authorized to demand a fare hike once every two years.
The DOTr denied LRMC’s petitions multiple times. Prior to the recent fare hike in April, LRMC had piled up a deficit of P2.17 billion tracing back to its first petition in 2016.
In spite of this, LRMC has gone on to complete its commitments under the concession, including the LRT-1 Cavite Extension Project, the first leg of which was opened in 2024. LRMC is tasked to shoulder P20 billion of the P64.9-billion project that seeks to extend the LRT-1 to Cavite.
Based on its financial report, LRMC may have grown its revenue by 14 percent to P2.88 billion in 2024, but it still ended up with P828 million in losses due to spending for the line’s upgrades.
Prior to MPIC’s plan to exit LRMC, the Ayala Group also announced it is looking for a buyer for its 35-percent stake in the operator as part of business realignment.