A significant shift is brewing in Manila’s public transportation landscape. Metro Pacific Investments Corp. is seriously contemplating a full exit from its involvement with the Light Rail Transit Line 1 (LRT-1), a move driven by persistent financial losses and a slow recovery in passenger numbers following the pandemic.
Manuel V. Pangilinan, Chairman and CEO of MPIC, revealed the consideration, stating bluntly that the company continues to hemorrhage money on the LRT-1 project. The stark reality of dwindling ridership, a direct consequence of COVID-19 disruptions, has forced a difficult reevaluation of their long-term commitment.
MPIC currently holds a substantial 35.8% stake in Light Rail Manila Corp. (LRMC), the operator of LRT-1, through its subsidiary, Metro Pacific Light Rail Corp. Other key stakeholders include Sumitomo Corp. with 19.2% and Macquarie Investments Holdings (Philippines) Pte. Ltd. at 10%, creating a complex web of ownership.
The LRT-1 concession, a massive P65-billion undertaking spanning 32 years, began in September 2015. LRMC, a joint venture between MPIC, Ayala Corporation’s AC Infrastructure Holdings, Sumitomo, and Macquarie, assumed responsibility for the railway’s operations and maintenance from the Light Rail Transit Authority and the Department of Transportation.
This potential divestment follows previous complications regarding a possible acquisition of Ayala Corporation’s stake in LRT-1. Valuation disagreements stalled those plans, leaving the future of the partnership uncertain. Last year, MPIC explored acquiring Ayala’s shares after the latter signaled its intention to sell.
Meanwhile, MPIC has firmly ruled out any interest in bidding for the operations and maintenance of the Metro Rail Transit Line 3 (MRT-3). Pangilinan confirmed the company hasn’t submitted any unsolicited proposals, signaling a clear focus on streamlining their existing portfolio.
The Department of Transportation plans to initiate the bidding process for MRT-3’s operations and maintenance within the first half of 2026. Despite hints of an unsolicited proposal surfacing in September, MPIC remains on the sidelines.
MPIC is a cornerstone of First Pacific Co. Ltd.’s Philippine operations, alongside Philex Mining Corp. and PLDT Inc. This potential LRT-1 sale represents a significant strategic adjustment for the conglomerate, reflecting a pragmatic response to challenging economic conditions and evolving market dynamics.
