Financial sustainability of mass transit

One of the large challenges on the horizon is how existing and future mass transit in the Philippines can remain financially viable so that services can be placed on a stable footing, and adequate operation and maintenance will be applied. This is of significant concern, especially because there are several major mass transit projects coming on stream over the medium term. The Metro Rail Transit Line 7 (MRT 7) is expected to be operational in the next one to two years. By 2032, the Metro Manila Subway and the North-South Commuter Railway are also expected to be online.

Financial sustainability of public transport operations is a natural challenge for any national agency or local government because of the expectation that fares should be kept affordable. There is likely to be constant political pressure to keep public transport fares as low as possible. For this reason, the revenue from railway fares is unlikely to cover the full cost of delivering the service. This implies that a continuing subsidy will be required so that operations do not suffer even if fare revenues fall below expenditures over a prolonged period.

If a continuing subsidy is required, the subsidy should not be dependent on the annual budget appropriated by Congress, as this could become unreliable and subject to political whim. There is therefore a need to find stable and reliable non-fare revenue sources and to earmark these for mass transit (in the same way that 'sin taxes' on alcohol and tobacco are channeled into funding vital and continuing health services). There are three substantial sources of revenue that can help to fund the possible financial deficits of mass transit operations: parking levies; congestion charging/congestion pricing; and traffic violation fines.

Parking levies: Free or very low-cost nonresidential parking spaces in urban centers are "magnets" for traffic; they attract increased motor vehicle use. In busy urban centers, there is a need to manage the demand for parking spaces as well as to compensate the rest of society for the added road congestion due to the availability of these spaces. There is ample justification for introducing a daily levy or tax on each nonresidential parking space in a crowded urban area, to be collected whether or not the parking space is used.

In Greater Manila, where there are over a million nonresidential parking spaces available, the revenue potential from a parking levy is considerable. A million nonresidential parking spaces, each subject to a daily levy of P100 would generate P100 million per day, enough to subsidize several million public transport trips daily.

Congestion pricing, whereby vehicles are charged a fee (collected like a toll) for entering the center of a city or a busy corridor or district, can help to reduce the demand for private vehicle use while providing a revenue stream that can support public transport development and operations.

The experience of New York City is instructive. In an article (found in www.curbed.com) titled "How Well Is Congestion Pricing Doing? Very," these were the highlights for the first 100 days of congestion pricing: complaints about car honking dropped 70 percent; rush-hour delays at the Holland Tunnel dropped 65 percent and travel time through it fell 48 percent; the number of cars entering Lower Manhattan fell by 6 million compared to a year earlier; traffic-related injuries in the congestion zone dropped by half; Metro-North ridership rose by 8 percent; and visitor counts in business improvement districts increased by 1.5 million year over year.

Clearly, congestion pricing offers an effective mechanism for curbing the demand for use of motor vehicles while providing a steady revenue stream that can support mass transit operations.

Fines and penalties for traffic violations are another rich source of additional revenue that could help keep public transport financially viable while maintaining affordable fares. The key is to bring back the camera-based no-contact apprehension system and fix any remaining legal and technical constraints. Cameras at every busy intersection or street corner will pay for themselves many times over, while altering driver behavior for the better. This mechanism will provide another meaningful stream of funds to support reliable and adequate public transport while keeping driver behavior in check.

Just as important as setting up the infrastructure for modern mass transit schemes is the establishment of funding mechanisms to ensure that public transportation will not be a burden on the national budget. This means, early on, putting in place the additional sources of revenue — parking levies, congestion pricing and fines from traffic violations — that will provide a steady, predictable stream of funding to cover the likely operating deficit.

Source: Manila Times

Why are you not wealthy yet?

Filipinos are among the most hardworking people in the world. We wake up early, hustle from job to job, send money to our families and even go abroad just to give our loved ones a better life. But despite all that effort, many still struggle to build lasting wealth.

The answer may not lie in how much we earn, but in how we think about money.

Many Filipinos fall into habits and mindsets that unknowingly sabotage our finances. These aren't just about poor decisions or lack of discipline. Often, they're rooted in cultural norms, emotional patterns and long-held beliefs that go unchallenged. If we want to change our financial future, we first have to recognize the hidden traps keeping us stuck.

One of the most common traps is the idea that as long as we have a job, we're financially secure. Earning money and building wealth are two very different things. Without savings, investments or a clear plan, that income can disappear quickly in an emergency. True financial security comes from what you keep and grow, not just what you earn.

Then there's the "I deserve this" mindset or "healing my inner child" which leads to lifestyle inflation. After receiving a salary increase or a windfall, many of us feel the urge to upgrade our lives — buying a new phone, eating out more often or booking a vacation we can't really afford. It's a way to reward ourselves after working so hard, and in many ways, we do deserve comfort. But when every increase in income leads to increased spending, we end up right where we started — broke, stressed and living beyond our means.

Another trap is the tendency to overextend ourselves for the sake of family. Supporting loved ones is noble, and helping each other is part of who we are. But there's a fine line between helping and sacrificing your own financial stability. When you're constantly bailing others out, you may end up needing help yourself. The best way to truly support your family long term is to ensure your own financial foundation is strong first.

Related to this is the "utang disguised as love" phenomenon. Filipinos are generous and loyal, especially when it comes to friends and family. When someone asks for a loan, we feel obligated to say yes, even if it means borrowing ourselves just to lend to others. Saying no feels like turning your back on someone. But true generosity doesn't require self-destruction.

Another common mindset is the fatalistic "bahala na" attitude. Many Filipinos leave their financial future to fate, hoping things will work out even without a concrete plan. But hope is not a financial strategy. Faith is important, but it needs to be paired with action. Having a small emergency fund, getting insured or creating a basic savings plan are small but powerful steps in the right direction.

On the flip side is the fear-based resistance to investing. Many Filipinos avoid anything related to stocks, mutual funds or financial instruments because of horror stories about scams or past mistakes. While caution is wise, fear can be paralyzing. Avoiding all investments due to one bad experience can keep you from opportunities that could grow your wealth. The key is to educate yourself, seek professional advice and start small. Investing doesn't have to be scary when you're informed.

Then there's the comparison trap, magnified by social media. You scroll through Facebook or Instagram and see friends posting about their new car, their out-of-town trip or their latest business venture. Suddenly, you feel pressured to catch up, to spend more, to show that you're not being left behind. This "sana all" culture fuels spending based on appearances rather than priorities. But your financial journey is not a race. Everyone's path is different. Peace of mind and financial security are more valuable than impressing others online.

At the core of these money traps is this truth: wealth-building isn't just about numbers, budgets or investments. It's about psychology, habits and awareness. Most of us don't realize we're trapped until it's too late.

The good news is it's never too late to change. Whether you're just starting your career or preparing for retirement, there's always time to shift your mindset. Ask yourself honest questions. Where is your money really going? What beliefs do you hold about money? Who are you trying to impress or save?

Once you see the traps, you can avoid them. Once you understand the patterns, you can break them. And once you take control of your mindset, you can finally take control of your money.

Source: Manila Times

Infrastructure spending declines in December

Infrastructure spending slumped by nearly 20% in December, but still exceeded the full-year program, the Department of Budget and Management (DBM) said.

Latest data from the DBM showed that spending on infrastructure and other capital outlays fell by 19.8% or P36.3 billion to P146.7 billion in December 2024 from P183 billion in the same month in 2023.

“This was attributed to the combined impact of the base effects of high capital disbursements in 2023, as well as the ongoing processing and release of cash allocations for payments of completed and ongoing capital outlay projects of various departments/agencies during the latter part of 2024,” the DBM said.

For the full-year, expenditures on infrastructure and other capital outlays jumped by 10.1% to P1.33 trillion from P1.2 trillion in 2023. This also exceeded the P1.24-trillion program by 6.7%.

The DBM attributed the faster infrastructure spending to the implementation of the Department of Public Works and Highways’ (DPWH) banner infrastructure projects as well as defense modernization projects of the Department of National Defense.

DBM data showed overall infrastructure disbursements rose by 8.9% to P1.545 trillion in 2024 from P1.42 trillion in 2023. It exceeded the P1.473-trillion program for 2024 by 4.9%.

“This was equivalent to 5.8% of GDP, well within the 5-6% target for 2024 and sustaining the 5.8% outturn in 2023,” the department said.

Infrastructure disbursements also include infrastructure components of subsidy and equity to government-owned and -controlled corporations and transfers to local government units.

“This was credited mainly to the accelerated infrastructure spending of the DPWH for its accelerated implementation of construction activities, particularly from carry-over or previous years’ projects, progress billings from completed ongoing infrastructure projects, as well as the direct payments made by development partners for foreign-assisted rail projects of the Department of Transportation,” the DBM said.

Oikonomia Advisory and Research, Inc. Economist Reinielle Matt M. Erece said the P122.2-billion increase in infrastructure and capital outlays in 2024 was partly driven by defense modernization programs of the government.

“This can be in response to the heightened geopolitical tensions felt by a lot of countries,” he said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said faster infrastructure spending last year can be partly attributed to preparations for the May elections.

“(This is) part of the preparations for the midterm elections, as basis for accomplishments that are consideration for the voters to choose some candidates based on their completed projects and programs,” he said.

Mr. Ricafort said the government likely expedited infrastructure projects in the first three months of 2025 ahead of the election ban.

The Commission on Elections’ ban on public works spending began on March 28 and will run for 45 days. The midterm elections are scheduled for May 12.

Mr. Erece said he expects slower infrastructure spending as the government “reviewed and removed some of the unprogrammed appropriations and other expenses that the administration felt were unneeded, at least in the short term.”

Source: Business World