Subsidy doubled to retire old jeepneys, but assistance still insufficient

MANILA, Philippines — The Department of Transportation is doubling its subsidy to drivers who would retire their old jeepneys and shift to modernized vehicles under a renewed push to phase out traditional jeepneys in a post-pandemic public transport system.

From P80,000, the government would now grant each driver P160,000 to be used as equity to qualify for loans with state-run Land Bank of the Philippines and Development Bank of the Philippines (DBP), Department Order No. 2020-006 stated.

The cash grant is crucial for drivers to secure bank credit, something they would have difficulty getting without a good financial standing.

“Due to prevailing economic factors, the price of modernized vehicles has gone up from P1.6 million to current market prices averaging at P2.4 million. Thus, the P80,000 subsidy can no longer cover the equity requirement as originally intended,” the order dated June 5 read.

An estimated 179,000 jeepney drivers are targeted to participate in the government’s flagship modernization of public utility vehicles (PUVs). The much-delayed and contentious program aims to replace old jeepneys, one of Filipinos’ primary modes of transportation, with new ones complete with a cashless payment system and GPS tracking device, among others. The reform would also see jeepneys powered by more environment-friendly fuels.

While the reform, carried over from the previous administration in 2015, was welcomed by commuters, drivers have long chastised the government for failing to provide adequate financing support, and instead require them to shoulder interest-bearing loans. 

Sought for comment, transport economist Robert Siy of the MoveAsOne transport coalition said while the increase in subsidy is a “move in the right direction,” the amount still falls short of what he estimates needed for the modernization to succeed.

“In our analysis, a subsidy level of P500,000 for the surrender of an old jeepney and financing of a new vehicle would accelerate the implementation of the modernization program and place the new public transport services on a more sustainable footing,” Siy said in a text message. 

But an increase of that magnitude is unlikely to come soon. At the original P80,000 each driver, the government would shell out P2.2 billion over the next three years. With a bigger subsidy, the amount is poised to increase, although the total budget was not stipulated in the department order.

Where are the jeepneys?

The additional assistance also came as the transport department takes advantage of the pandemic’s distraction to accelerate PUV modernization. It remains unclear how will this be done, but officials had been hesitant to allow typical jeepneys back on the road for fears social distancing will not be observed on the ride.

“We are still awaiting IATF and DOTr guidelines/directive on when to allow PUJs (public utility jeepneys) on the road. Once we are directed to open PUJ routes, then we will start with the calibrated opening of routes for PUJs similar to what we are doing with PUB (public utility buses) routes,” said Megan de la Cruz, spokesperson at Land Transportation Franchising and Regulatory Board.

But the need for more transport options only rises by the day, according to transport economist Jedd Ugay of AltMobility PH, a commuter group, and the government must do something to address the gap.

“People will be able to comply more to social distancing if there will be sufficient or more than enough transport options. Better to be more than needed than insufficient,” Ugay said in a text message.

As of June 10 in Metro Manila, where a general community quarantine is in effect since June 1, transportation data showed that there were 1,846 PUBs, 271 point-to-point buses, 16,043 taxis and 18,813 ride-hailing services which were granted special permit to ply their routes. The three railway system, meanwhile, operate at only 10-12% of their capacity to follow social distancing.