The Light Rail Transit Authority (LRTA) is seeking a P3 billion loan from state-run Land Bank of the Philippines to partially settle its remaining obligations to Light Rail Manila Corp. (LRMC), its private sector partner for the LRT-1 line

In a recent interview with reporters, LRTA Administrator Hernando T. Cabrera said the agency has already applied for the loan last year and is awaiting approval.

“We are processing a loan. We are borrowing around P3 billion from Landbank. We don’t know yet when it will be approved. That will be used to pay them (for) our remaining obligations,” Cabrera said.

The loan is intended to help cover the bulk of LRTA’s roughly P4 billion in claims from LRMC, which include reimbursements and fare deficit payments. Cabrera clarified that the amount is not fixed.

“More or less P4 billion. It’s not exactly P4 billion, and the fare deficit is included in that amount,” he said.

Of the roughly P4 billion obligation, about P900 million has already been settled, leaving the bulk of the amount pending and subject to the approval of the proposed loan.

The remaining balance covers reimbursements to LRMC for structural rehabilitation works, operating shortfalls, and right-of-way-related expenses it previously advanced.

These include P499 million for structural rehabilitation, P409 million for LRT shortfall, and P22 million for works under a right-of-way package that LRMC undertook and later billed to the government.

The fare deficit — which arises when regulated ticket prices fall short of the concessionaire’s agreed revenue entitlements — accounts for a substantial portion of the obligation.

“Around P3 billion, more or less,” Cabrera said when asked how much of the claim represents fare deficit.

This year, LRMC is targeting an average daily ridership of 450,000 passengers for LRT-1 by the end of 2026, surpassing its pre-pandemic level of approximately 440,000. 

The operator said that volumes have already returned to pre-COVID levels and expects further growth as infrastructure upgrades and the Cavite Extension enhance capacity and reliability.