LRT2
LRT2
LRT2
Executive Summary
Project Background
The Light Rail Transit Line 2 (“LRT2”) Project is a 13.8-kilometer line with eleven (11) stations
running in the east-west direction from Santolan, Pasig up to Claro M. Recto Avenue in Manila. It
is connected to three (3) other lines: LRT Line 1 running north to south from Monumento to
Baclaran; Mass Rapid Transit (MRT) Line 3 along Epifanio delos Santos Ave. (EDSA) from Taft Ave.
to North Ave.; and Philippine National Railways (PNR) Metro Commuter Line from Tondo to
southern and northern Metro Manila.
LRT2 was included in the National Medium-Term Development Plan 1993-1998 and regarded as
one “flagship project”. It aims to provide an alternative transport system that is safe, comfortable,
efficient and affordable – contributing to the overall transport sector goal of sustained public
transport-based development. It became fully operational in the first quarter of year 2004, serving
an average of close to 200,000 passengers daily.
Evaluation Objectives
The evaluation criteria included: (a) effectiveness; (b) efficiency; (c) impact; (d) sustainability; and
(e) relevance.
The study was supported under the National Economic and Development Authority Monitoring
and Evaluation (NEDA M&E) Fund. As NEDA plays a major role in monitoring and evaluating policies,
major capital programs and projects, as well as government plans such as the Philippine
Development Plan, the Fund finances M&E initiatives to gauge the success of development
interventions, extract lessons from project/ program implementation, and enhance existing
information technology applications and database management systems.
Evaluation Approaches
1. Socio-economic research
Traffic Count
This recorded the different transport modes plying the vicinity of LRT2 stations. It was done in two
(2) areas: (i) Recto – Rizal Avenue (Avenida) intersection at the west end of LRT2 in Manila; and (ii)
EDSA - Aurora Boulevard intersection in Quezon City. The count was designed to capture the
morning and afternoon/ evening rush, as well as days of the week representing the normal high-
volume and normal low-volume flow of vehicles.
1. Quantitative Analysis
2. Qualitative Analysis
Case Studies
On-site interviews were conducted to deepen understanding of findings. The case studies are
intended to bestow a human face to statistics and numbers. Case interviews were conducted with
three (3) major groups of project-affected people: (i) those who were resettled; (ii) vendors in the
vicinity of LRT2 stations; and (iii) jeepney drivers plying the LRT2 route.
This summary is organized according to the six (6) major evaluation questions.
Question #1: Was LRT2 Project implemented according to how it was originally planned?
1. Project period. Implementation was significantly delayed. LRT2 was originally scheduled to
operate first quarter of Year 2001. Santolan to Cubao services started third quarter 2003;
Cubao to Recto, first quarter 2004. Delays are attributable to: (1) acquiring road right-of-way
(RROW), which in turn required design changes; and (2) procurement. The same reasons are
highlighted in the previous (2008/ 2009) Ex-Post Study, which counted a total delay of three
(3) years and five (5) months. The delays exposed the project to higher prices and interest
charges, exacerbated by foreign exchange fluctuations.
2. Ridership projection. The projected level of 510,000 daily was too optimistic. The previous Ex-
Post Study noted the actual number of passengers to be one-third of planned. Actual levels
range from 175,156 to 202,333 (2012-2017). The projection exceeds the full system capacity
of 463,650 passengers derived in the course of the impact study (8 train sets multiplied by 282
daily trips). It will not be fair to declare that LRT2 is underperforming based on ridership
projection alone. The ridership projection also drove VOC savings, time savings, and other
targets to correspondingly high levels. In the 1990s, similarly high projections were being made
in the United States until a landmark study of 19 projects conducted by a transport economist,
Don H. Pickrell, created the “Pickrell effect” of improving forecasts.
3. Rolling stocks. At the time of the previous Ex-Post Study, 14 out of the 18 train sets were
operational. Now, only eight (8) are running. Delays in procurement of spare parts translate to
lower operating capacity. The engineering and maintenance group of LRTA can only resort to
usable parts from other non-operating trains. Rolling stocks across urban rails vary in
specifications, and there is no chance of parts interchangeability, which was one of the
recommendations in the previous Ex-Post Study.
4. Route selection. Compared to two (2) other options, the current Aurora Route is the best choice
since it traverses Radial Road 6 (R-6), a high-volume corridor with numerous traffic generators
– a major requirement for mass transit to be sustainable.
5. Weak links. At its midpoint, R-6 has low density communities spanning an area of more than
three (3) kilometers in diameter. That these communities do not need public transport is
reflected by the consistently low ridership at midpoint stations: Betty Go-Belmonte, Gilmore,
and J. Ruiz. Mass transit must serve a high-density corridor to survive; density is measurable
using Percent of People Near Transit (PNT).
6. Market potentials. The failure to build the rail line up to Tutuban in Divisoria reduced ridership
by an estimated 14%. Servicing Tutuban could have involved a commercial section in the
trainset; and multiply socio-economic impact by applying the Small Entrepreneurs Rail Line
Concept.
7. Feeder transport. This is any form of motorized or non-motorized vehicle bringing passengers
(rail riders) to any station. PUJs serve as major feeder, followed by tricycles and motorcycle
8. Physical outputs. (a) Depot – 1.24 ha. area completed compared to targeted 9.8 ha., due to
unsuccessful land negotiation. (b) Viaduct and track works – 13.8 km. completed as planned.
(c) Stations – eleven (11) fully operational. (d) Train sets – 8 out of 18 operating. (e)
Maintenance policies – functional. (f) Maintenance facilities – with sufficient capacity to serve
trains.
MAIN RECOMMENDATIONS
1. Route enhancements. To boost ridership, LRTA should expedite operation of the Masinag
extension (within 2019) to open up a new market in terms of growing settlements in eastern
Metro Manila. At the west end, LRTA should expedite the Tutuban extension (next three years),
and up to Port Area (next six years) – thereby putting in place the R-6 Small Entrepreneurs Rail
Line anchored to Divisoria.
2. Spare parts procurement. DOTr should delegate procurement to LRTA (starting 2019) as the
agency accountable for efficient operation of all rolling stocks. LRTA should consider three (3)
options, individually or in combination: (i) include parts in a 20 to 30-year agreement with train
supplier; (ii) include parts as an obligation of the local train supplier partner; and (iii) support
research and development and local manufacture.
3. Filling facility gaps. LRTA should build major transport hubs in both east and west endpoints in
support of a more efficient feeder transport system (next one to two years). By including park
and ride facilities, the road-to-rail shift will be accelerated. Financing of the facilities need not
come from government; income potentials from transport hub operations are sufficient to
attract investors.
4. Rail master plan. Beyond extension lines and transport hubs, LRTA should program investments
based on a comprehensive, multi-year plan as general reference integrating socio-economic,
environmental, and land use and zoning considerations (next two years). The plan will guide
private initiatives to complement public infrastructure. The plan can provide the basis for a
“plan-based RROW acquisition approach” to preempt costly delays in implementation.
5. IEC campaign. LRTA should develop an information and education campaign including a
passenger interaction system to promote the use of rail via on-line facility (within 2019).
Although a mobile information infrastructure is in place, LRTA needs to further innovate on
tech applications. Linked to this could be a comprehensive rebranding of LRT2 (next year 2020).
6. Others recommendations. (a) LRTA should commission an in-depth study focusing at the
midpoint of the LRT2 route, to better understand factors resulting to low ridership other than
low population density (within 2019). (b) Government as a whole should invest on
knowledgeable, incorruptible, and technically trained leaders to manage city region planning
and implementation (next two years).
1. LRT2 efficiency. The “tipping point” for LRT ridership is shorter travel time. Majority of riders
(81%) ranked comfort, accessibility, affordability, and safety after travel time, with a very wide
margin.
2. Queueing time. As part of travel time, queue time on average is 2.1 minutes. Queueing time
can be further reduced through IT/ smartphone applications. The average waiting time (for
the train to arrive) at a station is 3.0 minutes. This is consistent with the standard headway at
2 minutes and 9 seconds.
3. LRT2 accessibility. Passengers rated overall accessibility to the LRT2 rail system as good. This
includes access leading to the stations, stairs, escalators and lifts, and queuing at ticket booth/
vending machines and turnstiles.
4. LRT2 comfort. Riders are comfortable with seating. Commuters boarding near end-stations like
Santolan rated comfort higher than those boarding at middle stations like Cubao. Riders noted
that elevators and escalators were sometimes out of order. There were also complaints on rest
rooms.
5. LRT2 safety and security. Passengers’ perceptions on safety and security within the trains and
stations are notably good. Despite the presence of security personnel, however, various
incidents have been recorded by LRTA which usually involve personal belongings.
6. Non-rail operations. These are activities that are not directly required to operate the rail
system. LRTA is incorporating commercial operations as added attraction and convenience to
the riding public, and generating needed additional income. The business sector is involved,
e.g., as advertisers; as Wi-Fi service provider.
7. Operations and Maintenance (O&M). LRT2 is being operated and maintained as planned. Even
though LRT2 is a government-owned and operated urban rail, its performance has been better
than Line 1 and Line 3. LRTA has responded swiftly to isolated incidents including the train
collision on May 18, 2019.
MAIN RECOMMENDATIONS
1. Operating hours. LRTA should trial test (within 2019) an extension of rail operating hours up to
12:00 midnight, to gauge effects on ridership and financial viability. With emerging work shift
patterns and 24/7 business operations, LRT1 and MRT3 might also explore this
recommendation.
2. Expand Passenger Assist Railway Display System (PARDS). LRTA should upgrade (within 2019)
the PARDS to include regular on-line surveys to enable LRTA to more regularly “engage in a
conversation” with riders. LRTA can institutionalize (within 2019) the Rapid E-survey of Riders
using LRT2 Stations Wi-Fi.
1. LRT2 patronage. A substantial majority (93%) of households living within the project impact
area have members who take LRT2. In the non-project area, less than 10% of respondents have
members riding LRT2 – as expected, given that said area is more than one kilometer away from
any LRT2 station. Benefits will rise along with ridership.
2. Ridership profile. There are slightly more males (52%) than females (48%), as similarly noted in
the previous (2008/ 2009) Ex-Post Study. Out of every 10 riders, four (4) are studying while
three (3) are working. In addition, majority (88%) of riders do not own a vehicle. Riders are on
average 38 years old. Around 3% are children, while 10% are senior citizens.
3. VOC savings. With average LRT2 trip length going up from 6.6 km (1991) to 8.05 km (2018), and
estimated VOC savings per kilometer increasing from PhP 0.15 (1991) to PhP 0.17 (2018), LRT2
is generating VOC savings with an estimated value of PhP 92.1 million (2018), compared to the
projected PhP 1,000 million (1991). The optimistic ridership projection accounts for VOC
savings not reaching the target level.
4. Travel time savings. LRT2 is generating savings with an estimated value of PhP 339 million
(2018), compared to the target of PhP 1,400 million (1991). Again, the optimistic ridership
projection accounts for the target not being reached. A DID analysis with propensity score
matching was used to estimate LRT2 impact on travel time of both riders and non-riders.
Compared to the baseline (1991) figure of 10.3 minutes, the current net travel time reduction
is computed at 8.8 minutes, which however is statistically insignificant. In any case, the pivotal
view is that transport chaos would occur without LRT2 operating along R-6.
5. Travel expense reduction. Travel expenses expectedly rose as prices hardly ever go down.
Nominal daily expenses of LRT2 riders averaged PhP 62.00 per round trip. Travel expense
increased by an average of PhP 20.00 in the project area, which converts to PhP 10.00 in 2006
prices. Considering an average of nine years’ use of LRT2, the yearly travel expense increase is
4% in the project area.
6. Social inclusivity. Majority of LRT2 riders fall under two (2) professions, both of which are
building blocks for equitable and sustainable development: students (44% of total) and
employees (31%). Six out of every ten riders reached high school level, and less than one-fourth
are college graduates. Over half of riders (56%) are middle income (PhP 15,917 to 50,250
monthly income); one-third, lower income (max. PhP 15,917 monthly income vs. income
threshold of PhP 10,481 in 2018).
MAIN RECOMMENDATIONS
1. Projections and baseline. The ridership projection is close to three times the attainable level.
Recalling the Pickrell effect, NEDA should ensure that future projects will generate realistic
ridership and other projections, as these will affect impact evaluation ratings. Further, NEDA
should ensure that a baseline study is conducted for all major projects.
2. Nominal vs. real expenses. Project evaluators, in analyzing transport and other expenses,
should take into account inflationary effects. Fares can be seen to go down: (i) in terms of a
3. Travel time savings. Project evaluators should assess savings based not only on the train ride
itself but rather on the entire “LRT experience”, from entering the station, queueing, waiting
for the train, and exiting the station. Beyond LRT2, time savings analysis must cover the entire
origin-to-destination journey, including connecting rides via feeder transport, in the context of
an integrated transport system approach. Value of travel time savings should be expressed in
both nominal and real terms.
1. Expected economic impact at proposal stage. Based on projected VOC and travel time savings
as quantifiable benefits, the project was deemed economically viable given the 1990s
circumstances when it was proposed. The Economic Internal Rate of Return (EIRR) was 18%
compared to the SDR of 15%.
3. Potential financial performance at start of construction. LRT2 is financially feasible when the
hurdle rate is 6%. However, it is no longer financially feasible when the hurdle rate is raised to
10%. LRT2 is financially viable if a low return on investment is expected.
4. Variance analysis. Comparing actual and planned costs, Unfavorable Variance was reported for
the superstructure, consulting services, and interest and tax levies. The extended construction
period and a strong Japanese Yen compared to the Philippine Peso were main causes of
Unfavorable Variance.
5. Economic impact assessment. By comparing the Social Discount Rate (SDR) (10% in 2016) with
the EIRR of LRT2 (15.35% at the time of the previous Ex-Post Study), LRT 2 is deemed to be
economically viable.
6. Impact on business. Favorable perceptions about LRT2 are grouped into thematic areas:
businesses more accessible to customers; new business opportunities; higher sales; and
improved connection with suppliers. Less positive impacts include: no change in the nature or
financial performance of business; more intense competition; and reduced business activity.
7. Impact on land values. LRT2 is one of the factors affecting land values. However, project impact
is not conclusive. Of the 22 barangays classified as influence areas in this study, seven (7) were
studied and found to have higher land values. However, the increases do not display any
consistent trend.
8. Financial performance assessment. The baseline Farebox Ratio is 381% to 403%. From 2008 to
2017, the Farebox Ratio was less than 100%. The below-par ratio can be attributed to the
amount of operating cost, cost structure, and low ridership. The previous Ex-Post Study noted
that revenues barely cover operating expenses, and “that the financial status of LRTA is in
critical condition”.
1. Fare increase. LRT2 patrons value faster travel time much more than transport fare/ expenses.
In this light and to enhance financial viability, LRTA should consider a slight fare increase of PhP
1.00 to PhP 2.00 (within 2019) across the current destination-based fare matrix. LRTA should
balance two (2) considerations: (1) financial sustainability; and (2) affordability by patrons who
are fixed-/ low-income earners, as well as students who comprise the majority of loyal patrons.
Fare can be reviewed every two years and linked to price indices, to maintain revenues
required for operation and maintenance.
2. Non-rail income. LRTA should aggressively pursue strategies to raise non-rail revenues (starting
2019), through institutional tie-ups with business groups, tourism agencies, and advertising
firms. LRTA should continue to pursue naming rights to stations such as done for MRT3
Monumento Station. In combination with pursuing non-rail income, LRTA could seek an
additional subsidy from the national government (starting next budget year).
3. Subsidies. LRTA should seek an additional subsidy from the national government, or expand
sources of income to help sustain its operations (starting 2019).
4. Land value study. Since the evaluation findings are not conclusive, NEDA-MES could
commission a follow up study to be done as soon as updated zonal values become available.
Question #4: Were there any unintended economic/financial benefits realized and costs incurred
due to the project?
1. LRT2 “school bus service”. The project impacts significantly on education. The 44% share of
students translates to 100,000 regular school bus riders. LRT2 is conveying students in a
manner that is safe, comfortable, efficient and affordable. Without LRT2, students would suffer
from traffic chaos.
2. Boosting the poor man’s taxi and dyip. LRT2’s positive impact on the tricycle and jeepney
sectors – as feeder transport – is noteworthy. The transport modal split shows PUJs as most
prominent public transport, followed by tricycles.
4. Unintended traffic generator. As a result of agglomeration, LRT2 stations have become traffic
generators. Customers enter, park, and exit shops located around stations. Students,
employees, and other riders now residing closer to stations are themselves adding to the
congestion.
1. Institutional coordination. Recognizing the project’s agglomeration effects, LRTA, MMDA, Land
Transportation Franchising and Regulatory Board (LFTRB) and Local Government Units (LGUs)
should collaborate more closely to better rationalize feeder transport and traffic management
in the vicinity of the LRT2 stations (starting 2019).
Question #5: Is the project contributing to an alternative transport system that is affordable, safe,
comfortable, reliable, efficient and sustainable?
1. Modal split. LRT2 operations along R-6 provided the ideal transport solution to address the
growing road congestion dilemma. Despite the low day-by-day ridership average of 184,476
(2009-2018), the daily person-trips served by LRT2 would require an equivalent of about
13,177 PUJs or 18,488 UV Express – or even 2,635 buses. Without LRT2, R-6 will be one of the
most congested roads in Metro Manila.
2. Comfort, convenience and safety. Despite the distinctive benefits of LRT2, some commuters
are still not convinced to shift away from their current mode of choice. Non-rail riders will shift
to LRT2 for longer trips that are comfortable, convenient and safe.
3. Operational efficiency. LRT2 is currently operating inefficiently due to low revenues. The
number of operational rolling stocks is half the original fleet. This poses risks in LRTA’s
operations if and when some units start to break down, considering the whole system is over
15 years old.
4. Sustainability. LRT2 is unsustainable given its current situation. The main challenge to LRTA is
to increase daily ridership to about half a million passengers. Otherwise, the situation will
become more untenable in the next year or so, and compromise overall performance and
public image.
5. Social inclusivity. There is strong evidence that LRT2 is contributing towards developing an
alternative transport system that is affordable, safe, comfortable, reliable, efficient, and
sustainable. On reliability, close to 100% of HH survey respondents gave a rating of 3 and 4,
using a scale of 1 to 4 (lowest to highest). Similarly, high perception ratings are given for
comfort. Security perception ratings are most frequently high “3s” and very high “4s”.
6. Alternative transport system. The project continues to be highly relevant, as also noted in the
previous (2008/ 2009) Ex-Post Study. The project goal was initially couched in terms of an
alternative system, as rail is more efficient, environment-friendly and thus, more sustainable
compared to vehicles running on internal combustion engines. The physical lay-out of Metro
Manila, not to mention transportation traditions, however, calls for complementation between
light rail services and other means of transport. The objective is not for light rail to replace any
particular transport mode but rather, to improve the whole transport system.
Privatization. This is not a guarantee of success especially in mass transit. It should be noted
that most mass transit systems are not profitable, and the majority normally achieves
breakeven performance. Privatization of mass rail needs to be further studied. LRTA has a
track record proving its ability and potential to spearhead a prime initiative in mass transport.
MAIN RECOMMENDATIONS
1. LRT2 replication. If Light Rail Manila Corporation (LRMC) becomes successful with its business
strategy, LRTA – being the only mass transit age ncy in the country – must learn how to
replicate or even do better than current other rail lines (next three years).
2. Institutional coordination. The national government must pull its act together with other
agencies, LGUs, and non-government sector, towards strengthening its capacity in mass transit
operations (starting 2019). The government has the power to plan, finance and implement
plans that will benefit the general public.
3. Towards sustainability. LRTA must address (starting 2019) inefficiency (esp. spare parts
procurement), unsustainable operations (based on fare box ratio), and comfort issues – while
at the same time build on its good performance relating to reliability, affordability and safety
and security.
Question #6: To what extent has the project contributed to the overall goal of sustained public
transport-based development?
1. Access to key destinations. LRT2 riders feel it is now easier to go to: (a) schools, 82% of
respondents; (b) work, 82%; (c) government offices, 64%; (d) hospitals, allied medical services
and place of worship, 59%; (e) commercial or trading centers, 56%; and (f) police stations and
local security offices, 56%. Compared to the previous Ex-Post Study, there is palpable
improvement in access; for instance, only 24% of respondents then reported enhanced access
to place of work.
3. Small Entrepreneurs Rail Line. LRT2 can serve as “commodities transit” for small business
entrepreneurs (SBEs), transporting retail items in manageable packages, broadly replicating
the concept of a farm-to-market road. Divisoria and Antipolo can become end-to-end SBEs
supply hubs to generate more livelihood opportunities. A customized, dedicated car train and
security check facility will be needed to cater to SBEs.
4. Ease of passenger movement. With LRT2, travel is faster, more comfortable, and convenient –
sub-indicators of “ease of movement”.
8. Traffic volume. Traffic volume is expectedly rising along with the Metro Manila population (est.
10.0 m in 2000 vs. 12.9 m in 2015). In any case, LRT2 is impacting significantly in reducing traffic
volume along R-6. The traffic volume count in Aurora Boulevard and EDSA indicates high
dependency on private vehicles instead of public transport. On the other hand, the Recto–
Rizal Avenue traffic count shows a lower concentration of private vehicles and the greater role
of public transport.
MAIN RECOMMEDATIONS
1. Bus Rapid Transit (BRT). LRTA should consider investing in BRT (next two to three years) running
under the LRT2 viaduct. Many cities worldwide favor BRT as a more practical way to address
the need for urban mobility. A one-kilometer mass transit track is 10 times the cost of a BRT
track. BRT can ferry the same number of passengers, without the same heavy infrastructure
requirements of light rail.
2. Feeder transport. LRTA should diversify its operations to include feeder transport (next one to
two years), in order to enhance patronage and further promote LRT2 services. This is
commonly done in many countries where the same agency operates not only trains but also
inter-linked transport services under the same “brand”.
3. SBE Line Concept. LRTA should pursue the strategy of making LRT2 a key driver of enterprise
development along R-6 (next one (1) to two (2) years). A feasibility study should be made to
validate business potentials.
The impact evaluation findings, conclusions and recommendations per indicator are summarized
in matrix format in Annex 1, intended to provide the reader with quick access to the full range of
main evaluation results.