WHAT IS THE LOGIC OF A STATE-RUN NATIONAL BUS COMPANY?

WHAT IS THE LOGIC OF A STATE-RUN NATIONAL BUS COMPANY?

When I was Director General of the National Computer Center and concurrently head of the National Computer Institute (NCI), I faced a dilemma: was it right for the government to operate a computer school that competed with private institutions?

After much thought, I concluded that it was justifiable—if two conditions were met. First, the state-run school must offer better quality at lower cost. Second, even if it lost money, it could be defended if the country urgently needed trained people. In short, public purpose could justify financial loss.

That same logic applies to transportation.

We once saw this in Philippine Airlines when it was still state-run. The rationale was simple: it could operate “missionary flights” to unprofitable destinations because national connectivity mattered more than margins.

Now comes the question: what is the logic of a state-run national bus company?

Transportation is not just a business. It is a public utility. If we leave everything to private operators, they will naturally concentrate on high-density, profitable routes. Who, then, serves the remote barrios? Who connects island towns to provincial capitals?

Take the case of Philtranco, once an icon of long-distance travel. Its closure is not just a corporate story; it is the loss of institutional memory and nationwide reach. Could the government step in—perhaps own the brand and infrastructure—while allowing professional operators to run it under contract? That hybrid approach is worth studying.

The logic of a national bus company rests on four pillars.

First, the universal service obligation. A private firm cancels a route with only three passengers. A state-run entity might keep it because those three passengers need access to hospitals, schools, and markets. Profits from busy corridors can cross-subsidize rural routes. That is social equity in action.

Second, the economic multiplier effect. Cheap, reliable transport is not an expense—it is an investment. When workers can travel affordably, employment rises, commerce expands, and tax revenues increase. The “loss” on a ticket may be offset by gains in GDP.

Third, integrated planning and environmental goals. A national operator can synchronize routes with rail systems, airports, and ports. In countries like Switzerland, the state-owned PostBus connects even remote villages with clockwork precision. In Germany, Deutsche Bahn operates extensive regional bus networks alongside rail. A centralized system also makes fleet electrification easier.

Fourth, market stabilization. A state-run company can impose fare ceilings and prevent price spikes during holidays or fuel crises. It can also set labor standards, providing stable jobs and benefits that raise the floor for the entire industry.

But let us not romanticize. Critics warn of bureaucracy, inefficiency, political interference, and mounting subsidies. Without competition, complacency can creep in. If subsidies balloon, taxpayers carry the burden.

So what is the answer? Perhaps not pure nationalization nor pure privatization.

A Public-Private Partnership (PPP) model might strike the balance. The government could own the network, brand, and standards. Private operators could supply buses and management expertise under performance-based contracts. The state defines the social mission; the private sector delivers efficiency.

We must also confront a hard truth: in a country with persistent poverty, there is no “purist” model. If we want inclusive growth, some level of subsidy is inevitable.

The real question is not whether a national bus company can make money. The real question is this: can we afford a transportation system that leaves entire communities behind?

That, to me, is the deeper logic.

RAMON IKE V. SENERES

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