Obstacle to jeepney modernization

The plan to upgrade the public transport system is being delayed again after the Land Transportation and Franchising Regulatory Board (LTFRB) decided to extend the franchise validity of the ubiquitous passenger jeepneys to give operators and drivers more time to form cooperatives that are crucial in the public utility vehicle (PUV) modernization program. Under the Department of Transportation’s (DOTr) omnibus franchising guidelines issued on June 19, 2017, only corporations or cooperatives with at least 15 vehicles would be allowed to apply for new route franchises.

The franchise for traditional jeepneys was originally scheduled to expire by the end of March nationwide, except for Metro Manila where these would be valid until the end of April. In extending the deadline, LTFRB Chair Teofilo Guadiz III said the board took into consideration the possibility of a transportation shortage should it implement the deadline. “We do not want to leave anybody [behind] so what we want is to have at least 95 percent on board if we continue this PUV modernization [program],” he said, noting that only 60 percent of jeepney drivers have so far enlisted for the program. To date, the DOTr noted that 6,000 modernized jeepneys are already operating in the country.

The most contentious issue has been the cost of modernizing the jeepneys, long regarded as an inefficient form of public transport due to the use of decades-old and inefficient diesel engines that pollute the environment. When the previous Duterte administration launched the program in 2017, each replacement unit was to cost about P1.2 million. However, the program did not move following the onset of the COVID-19 pandemic in early 2020. Last October, Transportation Secretary Jaime Bautista announced that the government was reviving the push to modernize PUVs. But the problem is that the price of a replacement unit has doubled to P2.4 million, and this has been the reason for the continued opposition to the program. Ricardo Rebaño, president of the Federation of Jeepney Operators and Drivers Association of the Philippines (Fejodap), pointed out that operators needed to pay a monthly amortization of P475,000 to operate 15 modern jeepneys despite their low daily earnings due to the pandemic.

There is no doubting the need to modernize the public transport system. According to the LTFRB, the PUV modernization program would make commuting and public transportation in the country safe, more efficient, climate-friendly, and environmentally sustainable. Aside from fleet modernization, other components of the program include route rationalization, local public transport planning, and industry consolidation. But the prohibitive cost to drivers and operators is something that the government needs to address. In a December 2021 study published in the Philippine Transportation Journal, researchers from the University of the Philippines took a closer look at the modernized jeepney operations in General Santos City, one of the pilot cities for the program. “Based on interviews and the operators’ survey, it was clear that modernization has been very costly, from the necessary capital investments down to the operational expenditures,” according to the study.

Since the main issue boils down to cost, the government should find ways to bring it down further. The Marcos Jr. administration’s decision to remove tariffs on electric vehicles (EVs) will hopefully help in this regard. The National Economic Development Authority (Neda) board approved in November last year a measure temporarily removing tariffs on EVs and certain parts to spur demand. A more palatable financing program from the state-owned Development Bank of the Philippines (DBP) also needs to be crafted to make the transition more affordable to operators and drivers. But for areas where the income of jeepney drivers is really not enough to make ends meet, the government can in the interim adopt a program to replace the inefficient engines of jeepneys with modern, emission-compliant ones to conform with the latest standards. This is particularly true in the provinces where the population is not as dense as Metro Manila’s. They may not have GPS tracking and other modern features, but they will no longer be polluters. Also, such a move will definitely cost just a fraction of the price of a new modern jeepney.

The government cannot implement the jeepney modernization program as a one-size-fits-all solution across the country given the different population numbers and income capacities of each province, municipality, or city. It has to continue choosing which cities and towns to go first, based on the profitability of the routes there and the number of jeepney drivers who can form cooperatives. The LTFRB’s move to delay the program is understandable given the plight of many jeepney drivers, but it cannot delay the program for too long because of the country’s pressing need to keep public transportation efficient and also protect the environment.