LAST Sept. 19, 2026, provincial and city bus operators issued a statement regarding their inability to continue operations with the prevailing low fares and rising fuel costs. Public transport capacity has shrunk over many decades because transport operators have been unable to remain financially viable or to replace aging equipment at current fare levels. When transport operators go out of business, commuter welfare suffers.
Should all fares for road-based public transport remain tightly controlled by the Land Transportation Franchising and Regulatory Board (LTFRB)? I will argue that certain types of public transport services should be liberalized in terms of fares, routes and the number of authorized units, with operators given more leeway to make periodic adjustments in schedules, units and fares after giving proper notice to the public and the LTFRB. The managed liberalization of selected public transport services can deliver positive outcomes that can ease our difficult mobility environment.
We have experienced the benefits of a more competitive and liberalized regime in the case of domestic airlines. For decades, Philippine Airlines was the sole domestic carrier, with the Civil Aeronautics Board deciding on routes to be offered and fares to be charged. After the liberalization of domestic air travel in 1995, Cebu Pacific and several other airlines entered the market, offering competition and giving passengers more travel options. Where effective competition existed, airlines were given the freedom to propose new routes and fares and to offer different levels of service. Passengers benefited from a wider range of options in terms of destinations, service quality and price. Can some of these benefits be replicated in the road-based public transport industry?
In road-based public transportation, there are contexts where competition can be unsafe and inefficient, for example when you have on-street competition among bus or jeepney drivers for passengers on the same route. If the income of a jeepney or bus driver is linked to the ridership of the vehicle he is driving, the driver will be motivated to linger at stops or to race ahead to beat other PUVs to load passengers waiting at the next stop. For such routes, services need to be coordinated and organized for the convenience and safety of commuters. This is best achieved through consolidation, gross cost service contracts or combining all route revenues in a single pot under a cashless fare collection scheme so that all drivers work as part of the same team instead of competing for passengers.
However, there are other modes of public transportation, such as P2P buses, UV Express services, airport buses and provincial express bus services operating between designated terminals where greater liberalization makes sense. The important requirement is access to suitable off-street terminals or loading and unloading bays at the origin and destination. If a qualified operator is able to comply with the service and safety standards established by the Transportation department and the LTFRB, it should be allowed to provide the service.
Under such an arrangement, operators will have greater freedom to establish new routes, add vehicles and set fares. Fares and service levels will be registered with LTFRB, publicly disclosed and communicated to passengers in advance of any change. Operators can offer different combinations of price, frequency, comfort and service quality. One operator might offer a lower-priced basic service while another, at a higher fare, might offer guaranteed seating, more spacious vehicles, advance reservations or a higher-frequency premium service.
Transport operators will then be able to set fares that allow them to recover fully their costs and make a reasonable profit. The ability of new players to compete should discourage monopolies and help keep fares at reasonable levels. Where only one operator serves a route and effective competition is absent, however, the LTFRB should retain the authority to review fares and protect passengers against excessive pricing.
Passengers will benefit from additional supply and more travel options. In the UV Express and P2P Bus sectors, new and existing operators will have incentives to bring in more units and add capacity to existing routes; they will also be encouraged to innovate and to develop new routes, destinations and better terminals. With increased capacity, waiting times at terminals during rush hour will be reduced. More spacious seating on “Premium” UV Express vehicles will attract a new market segment, even at higher fares. New routes can emerge to serve communities that have remained poorly connected by public transport.
One danger is that operators will naturally concentrate on profitable routes and periods of high demand. Liberalization therefore cannot replace government responsibility for ensuring public transport on socially necessary but commercially unattractive routes. Such services can be provided through competitively awarded service contracts. Similarly, access to major terminals should be open and non-discriminatory so that control of a terminal cannot be used to prevent new operators from entering a market.
In this environment, the LTFRB could concentrate on registering operators, routes, fares and service commitments; disseminating information on available public transport services; protecting competition; and monitoring compliance with service and safety standards. Government regulation will therefore shift to ensuring safety, transparency, competition and quality instead of deciding how many vehicles an operator may deploy or what fare it may charge.
Passengers should not have to queue for hours because an operator is prevented from adding vehicles to meet demand. Transport operators will be expected to deliver better and higher quality services in exchange for higher fares. Innovations such as advance ticketing and seat reservations should become commonplace. Airport buses should offer reliable connections to major malls, hotels and transport terminals, while P2P operators should increase dispatch frequency whenever passenger demand warrants additional capacity.
We should regulate public transport according to the type of market involved: where competition takes place dangerously on the street, services should be coordinated; where operators can compete safely through price, quality and frequency, the government should encourage competition. The deregulation of the domestic airline industry delivered significant benefits for passengers, ultimately benefitting the country’s tourism industry. A similar outcome is very much possible with managed liberalization of road-based public transport services.
Robert Y. Siy is a development economist, city and regional planner, and public transport advocate.
