A short glimpse into history shows the Spanish discovering the archipelago and setting up in Manila around 1571.  After three centuries of colonization, the Americans replaced the Spanish in 1898 and remained until 1946, interrupted only during the Second World War when Japan occupied the country.  As in most Asian countries, there is a strong presence of Chinese, mostly in business.  The intermingling of these cultures with the previous indigenous population provides a fascinating mixture and explains much of the background of public transport at present.

n Evolution of Philippine Transportation

The Kalesa, a horse-drawn carriage, was the prevalent mode of transportation during the Spanish Era.  In 1905, a tranvia (or tramvia) or electric street tramway came into service. Operated by the Manila Electric Railroad and Light Company (Meralco), the tranvia was a great success, providing a cheap and efficient transport service for the 220,000 inhabitants of the period.  Services stopped before the Second World War. Today, Meralco is the main electric power supplier for Manila.
 

After the war, surplus army jeeps were converted into the famous "jeepneys" seating about 12 to 15 passengers on longitudinal benches behind the driver’s partition. They are privately owned and ply along fixed routes painted on the side of the vehicles. Fares are modest, and they stop anywhere on request.

Public and private buses with fixed stops and running on time tables operate side-by-side with the jeepneys on the outer corridors. Air-conditioned buses at twice the ordinary fares run between the main shopping centers. A modern diesel multiple unit suburban rail service operates along a peripheral route on neglected track.

The traffic jams in Manila are staggering. Only a few traffic lights, often disregarded, separate the combatants. Everyone forces his way across the junctions, thus blocking everyone else, and so the government decided to find a solution. In 1966, it granted a franchise to the Philippine Monorail Transit Systems Inc. to plan, build and operate a monorail system. Before the feasibility study was completed, the Japan International Cooperation Agency (JICA) was asked to do a transport study. This was undertaken between 1971 and 1973 and proposed a system of radial and circumferential roadways, an inner-city rapid transit system, a commuter railway service and an expressway with three branches. A further study was commissioned to find ways of implementing the conclusions. Many of these recommendations were carried out, but none concerning rapid transit.

From 1976 to 1977, a fourteen-month study funded by the World Bank was conducted by Freeman Fox and Associates, and this suggested a street-level light railway.  The then newly created Ministry of Transportation and Communications (MOTC) reviewed and revised the recommendations, introducing an elevated version because of the many intersections.  This raised the cost from P1.5 billion to P2 billion.  Another foreign firm was commissioned by MOTC for supplementary study which was completed within three months.

On July 12, 1980, the country’s president, Ferdinand E. Marcos, created the Light Rail Transit Authority (LRTA) as a government agency.  The Chairman was the then First Lady and Governor of Metro Manila, Imelda Romualdez Marcos.  This LRTA confined its activities to determining policies, to the regulation and fixing of fares, and to the planning of extensions to the system.  The project was called Metrorail and was operated by a sister company of the former tramway company Meralco, called Metro, Inc.

Initial assistance for building the LRT project came from the Belgian government which granted a P300 million "soft" and interest-free loan with a repayment time of 30 years.  The project was expected to pay for itself within a period of 20 years out of revenue alone.  A Belgian consortium consisting of ACEC (Ateliers de Constructions Electriques de Charleroi, BN), (Constructions Ferroviaires et Metalliques, formerly Brugeoise et Nivelles), TEI (Tractionnel Engineering International) and TC (Transurb Consult) provided an additional loan of P700 million.  The consortium provided the cars, signalling, power control, telecommunications, training and technical assistance.  The entire system was expected to be financially 'in the red’ well into 1993.  Against an expected gross revenue of P365 million for the first operating year, government losses were thought likely to reach P216 million.  The system was designed as a public utility rather than as a profit center.

Construction of the line started in October 1981, and was the responsibility of CDCP (Construction and Development Corporation of the Philippines), with assistance from the Swiss firm of Losinger and the American company Dravo, the latter, through its Philippine subsidiary.  The government appointed Electrowatt Engineering Services of Zurich (Switzerland) to manage and supervise the project. Electrowatt set up offices in Manila and became responsible for extension studies of the system which eventually comprised 150 km of routes along all major corridors in about 20 years time.