Govt moves to settle ₱3.6-B obligations to LRT-1 operator

The Department of Transportation (DOTr) and the Light Rail Transit Authority (LRTA) signed a credit line agreement with the Land Bank of the Philippines (LandBank) on May 14, 2026 to finance the partial settlement of approximately ₱3.6 billion in contractual obligations to Light Rail Manila Corporation (LRMC), the private concessionaire and operator of the Light Rail Transit Line 1 (LRT-1).

In a news release dated May 19, Transportation Secretary Banoy Lopez said the agreement would enable the government to address outstanding obligations under the LRT-1 concession agreement and support the continued operations of the rail line.

“We hope that as we settle our obligation with the private concessionaire, we will see more improvements on their services, including structural upgrades, digitalization, and reliability of the rail line,” Secretary Lopez said.

The LRT-1 concession agreement, signed in 2014, granted LRMC a 32-year contract to rehabilitate, operate, maintain, and expand the rail system, including the Cavite Extension Project. The public-private partnership involved approximately ₱35 billion in private sector investment and an upfront concession payment to government amounting to about ₱11 billion.

PHOTO FROM NATE BARRETTO

Under the agreement, LandBank will provide financing to the DOTr and LRTA to cover part of the government’s obligations to LRMC arising from the concession arrangement. The obligations include payments associated with fare adjustment delays and other contractual commitments under the concession agreement.

LandBank President and CEO Lynette Ortiz said the agreement reflects the government’s commitment to meeting its obligations and sustaining partnerships with private sector infrastructure operators.

“This loan facility represents a deliberate action by the National Government, through the LRTA and the DOTr, to fulfill its commitments and maintain strong and credible partnerships with its development partners,” President and CEO Ortiz said.

The LRT-1 concession was implemented to modernize and expand the rail system without direct government subsidy for operations. The project included the rehabilitation of the existing line and the construction of an 11.7-kilometer extension to Cavite. However, the concession has also faced challenges, including delayed fare adjustments, lower-than-projected ridership, and disputes over government payment obligations.

Secretary Lopez thanked Finance Secretary and LandBank Chairman Frederick Go and President Ortiz for facilitating the financing arrangement.