It’s time to start an advocacy to kill harmful government subsidies!
 
A couple of days ago, I took the MRT around mid-afternoon to visit a client in Makati whose office is a short walk from an MRT station. My own is also just a short walk from another.
And it just struck me how badly pricing of the MRT has been managed. Low pricing drains money out of the pockets of people who do not use it and keeps it in the pockets of people who benefit from its many advantages.
 
Meanwhile, the MRT is badly deteriorating. Soon the thing will be useless. Grime has built up, cars are showing wear and tear, are overcrowded and breakdowns happen too often.
 
But ticket prices remain unrealistically low, despite massive overcrowding indicating great demand. It’s clearly a case defying the law of supply and demand. Just look at the number of people who crowd the trains even during non-peak hours and the huge lines extending to ground level at peak hours.
 
The lines to buy tickets were not too long during the mid-afternoon. But by the time a train came up to the station, there were enough people at the Quezon Avenue stop to fill up most of the train and that was nearly at the very start of the MRT line! No doubt there is demand.
Why? Because the ride was quick, comfortable and relatively safe. Unlike the alternatives available to the average rider such as the buses and jeeps which are slow, badly driven, dangerous and smoky from all the pollution that law enforcement officers can’t seem to notice and stop.
 
But, I repeat, the price of a ticket stays unrealistically low. This needs subsidies from everyone else in the Philippines (via taxes collected from all but spent unnecessarily on a few). Government services should be priced on the basis of “User Pays” but this is not following that principle.
 
Why is the government subsidizing this? Clearly it is fearful of negatives, just like any brand manager confronted with a demand for a price increase from his/her company’s financial types. The government does not want any negative backlash .The brand manager is afraid of a loss of volume.
 
How might the government want to deal with this?
 
First, let us identify the stakeholders here. Who benefits from the subsidy? Mainly, the riders and to a lesser extent, the politicians who fear negatives from the people. How many are they? Probably a million people, very generously estimated.
 
On the other hand, who do not benefit from the subsidy? Said differently, who can better use a subsidy? Millions of more Filipinos. And it is not just the numbers, it is also the stories. Like any good brand manager knows, a strong emotional pull will help any advertising, as well as any good cause.
 
So what are the stories? Start with patients of government hospitals who suffer painful illnesses, often life-threatening, with inadequate care. They can use a subsidy better! Who else? Students who do not get a decent classroom, studying instead under the trees! Teachers who do not get paid decent salaries and whose families suffer in silence. Soldiers who get lousy equipment and die horrible deaths as a consequence. Soldiers’ poor little children who lose their fathers.Citizens who suffer because of poor law enforcement as polluting buses keep running around causing illness for thousands of people, crimes that do not get solved, criminals who get away. The list goes on and on.
 
Against dramatic stories like the above, a complaining MRT rider has no chance.
 
But what about previous experience with big price increases?
 
Look at the expressways then. With huge price increases but with clearly much value added, the initial complaints did not prosper. People now pay with no complaint. Even before the government made any use of the kind of heart-rending stories I referred to above.
 
Besides, if the PCSO can make gambling sound like a good cause, selling an MRT price increase should be peanuts. So let us get on with it already! Stop the subsidy nonsense! The wrong people are paying!
 
 
Benedicto “Poch” Cid is the Chief Brand Adviser of Mansmith and Fielders, Inc. (www.mansmith.net), the leading marketing and sales training company in the Philippines. For inquiries, please email info@mansmith.net call (+63-2) 584-5858 /412-0034 or text (63) 918-81-168-88. Please also send your marketing, sales and strategy questions to mentors@mansmith.net.