In the Philippines, public transport services are primarily run by private operators under government-issued franchises or permits, with the Land Transportation Franchising and Regulatory Board (LTFRB) serving as the main regulator.

Historically, the LTFRB’s role has been limited to licensing qualified operators, leaving the provision of transport to private initiative. Ensuring sufficient transport supply to meet public demand was not viewed as a government obligation, resulting in minimal efforts to address service deficits. This structure relegates public transport to a commercial enterprise rather than an essential public service.

This market-driven approach has caused significant issues, including unsafe competition among drivers, service disruptions during low-demand periods, and the widespread use of polluting vehicles. Without coordinated operations, services are often inadequate and unpredictable, especially during rush hours, highlighting inefficiencies in the current system.

A shift in perspective is needed to treat public transport as a basic need and public service, prioritizing commuter interests. Deficient transport services hinder Filipinos from accessing jobs, markets, and essential services, impacting their fundamental rights and freedoms. Policymaking must balance the competing interests of governments, private operators, and transport service entities while ensuring commuters remain central to decision-making.

To address these challenges, local government units (LGUs) should play a greater role in ensuring safe, reliable, and affordable public transport — objectives central to the service contracting program.

However, with the program receiving no allocated budget in the 2025 General Appropriations Act (GAA), it is now crucial to explore how LGUs can take a more active role in improving public transport services within their areas of responsibility. This also comes at a time when we expect public transport services as one of the functions to be more significantly devolved to LGUs.

In this article, we propose three models that demonstrate how LGUs can take a more active role in public transport service provision, offering a pathway for reform in the sector.

Three models for LGU involvement

1. LGU-Operated Services
In this model, LGUs own and manage their own fleet, or outsource operations to a third party. They may also secure agreements or special permits from the LTFRB to allow fare collection. Examples include Makati City’s free shuttle services (launched in March 2014 but suspended in July 2015) and Quezon City’s Bus Program. Both operated without fare collection. A better approach can be seen in the Clark Loop Program, where the Clark Development Corporation owns and manages a fleet and collects fares under an LTFRB permit.

2. Public-Private Partnership (PPP) for Transport Operations
Here, LGUs form partnerships with private companies to manage public transport services on designated routes. Assets and franchise rights can either be jointly owned through a joint venture or exclusively held by private entities. Cavite’s Bus Rapid Transit (CBRT) system, developed in partnership with private developers, is an example. Given that the private proponents of the Cavite BRT are involved in property development, there is an opportunity to design the CBRT as a transit-oriented development. This approach could leverage the increase in land value resulting from the project to generate additional funding for the CBRT. Similarly, Iloilo City’s proposed electric bus rapid transit system follows this model.

3. Fare Collection Oversight
Under this approach, the LGU does not operate public transport but manages fare collection, potentially via an automatic fare collection system. Alternatively, the LGU forms a PPP with a private company, which in turn enters into a service contract with the existing transport service entities (TSEs) and centrally handles the fare collection. The franchise remains with the TSEs, and the LGU (or the private company) compensates them according to the service contract terms. The Smart Urban Mobility Project (SUMP) in Baguio City exemplifies this model. It integrates service contracting, fare automation, and congestion charging to enhance efficiency and accountability while reducing traffic congestion.

Moving forward

While these models offer pathways for reform, they may face resistance from transport service entities concerned about LGUs becoming competitors or disrupting existing operations. To mitigate this, social assistance programs, such as those implemented in the Davao Public Transport Modernization Project, can support displaced operators.

Dr. Graham Currie, a public transport professor, outlined a typology of ownership and competition models in public transport, ranging from economic deregulation and privatization to competitive regulation (tendering and franchising), negotiated contracts, and regulated public monopoly, with increasing government regulation and decreasing private involvement along this spectrum.

The deficiencies of the current system underscore the need for greater local government involvement in public transport. By adopting a different model, LGUs can transform public transport into a dignified service that meets the needs of all commuters.

The time has come to rethink the role of LGUs in shaping a more sustainable and equitable transport future. – Rappler.com

Robert Y. Siy is a development economist, city and regional planner, and public transport advocate. He is Co-Convenor of the Move As One Coalition.

Toix Cerna is a development worker who has been following policies and programs affecting Filipino commuters. 

Varsolo C. Sunio, from the University of Asia and the Pacific, is a published academic specializing in public transport governance and reform. In 2024, he pursued research as a visiting senior scholar at Portland State University (Oregon, US) funded by Fulbright.