Transport expert warns of job losses, jeepney shortage
While the government’s jeepney modernization program prioritizes safety and efficiency in public transportation, a transport expert warns the “bad execution” of the program could lead to job losses for over 200,000 drivers and threaten the livelihood of 150,000 small business operators reliant on traditional jeepneys.
The PUVMP’s deadline for jeepney drivers and operators to consolidate franchises passed on April 30, 2024. Unconsolidated jeepneys now risk being apprehended as colorum vehicles.
The PUVMP, which starts in 2017, aims to replace traditional jeepneys that are not deemed roadworthy with modern vehicles that have at least a Euro 4-compliant engine to lessen pollution.
Rene Santiago, a transport expert and chief executive of Bellwether Advisory Inc., told the Manila Standard that the government’s PUV modernization program would result in more unemployment in the transport sector, particularly affecting jeepneys where more than 200,000 drivers depend for livelihood.
“Also affected are small business enterprises, since there are more than 150,000 operators,” he said.
Santiago said the“bad execution”of the program could disrupt transportation options for commuters in roughly 200 local government units (LGUs) reliant on jeepneys. This might translate into longer waiting times or force them towards pricier alternatives like motorcycle taxis and transport network vehicle services (TNVS).
“It [the program] will also disbenefit commuters, even those who manage to squeeze in fewer modern jeepneys [which will be overcrowded],”he added.
“We have been in a transport crisis since the Covid pandemic. DoTr [Department of Transportation] likes to gaslight a good program that is badly implemented. They emphasized consolidation, even before they could formulate a route restructuring plan,” Santiago said.
Modernization costs
Santiago said there is a cost to modernization, and the transport sector needs a subsidy to cushion the impact.
A study titled, “Addressing the “blind side” of the government’s jeepney “modernization” program,” by transport expert Teodoro Mendoza raises concerns about the financial feasibility of the government’s jeepney modernization program. The high cost of acquiring new vehicles could pose a significant challenge.
He said that in Metro Manila alone, about P11.68 billion is needed to replace the 73,000 traditional jeepneys.
To replace 300,000 traditional jeepneys nationwide, Mendoza said financing could reach anywhere from P540 billion to P750 billion.
“Given this, will government banks have sufficient money to fund this enormous project of the government and will these banks provide loans to new cooperatives that are yet to have a track record in managing huge amounts of loans? The expensive modern jeepney seems to present an insurmountable problem rather than a solution,”he said.
Under the program, the government only provides a subsidy amounting to about P160,000 for equity.
“It is doubtful if there are sufficient funds for the subsidized equity. For Metro Manila alone, about P11.68 billion is needed for the 73,000 traditional jeepneys to be replaced. To replace 300,000 units nationwide, the LTFRB will need an additional budget of about P16 billion annually for three years,” Mendoza said.
The price of a modern jeepney starts at P1.6 million to about P2.5 million per unit.
The study also says that as the price of the modern jeepney increases, fares will increase as well.
“Fares increase by P1 per P200,000 increase in jeepney prices. At a low daily passenger ride [200 persons] and if the price of the jeepney is P1 million, each passenger should pay a fare of P24 [for both interest rates]. Interest will affect jeepney fares should the modern jeepney be priced starting at P1.8 million,”Mendoza said.
“The fare would be pegged at P21 and P24 if the jeepney is priced at P1.8 million and P2.5 million, respectively,” he said.
Localized modernization
Given this, Mendoza recommended a “localized modernization,” for the medium- to long-term.
“We can locally produce rubber tires [which, however, will require manufacturing capacity] and vehicle parts that do not involve ‘rocket science’ or complicated mechanisms,” he said.
“Localized modernization will generate more jobs, avoid dollar outflows due to importation, increase the value of our products [particularly rubber], generate higher incomes for our rubber growers, and provide higher revenues for local providers and makers of vehicle parts and accessories,” Mendoza added.
Santiago, however, recommended that the government enact a 10- to 15-year Public Transportation Modernization Program with funding for buying out old units, and subsidizing acquisition.
“Also de-emphasize asset consolidation,” he said.
Santiago said the government should upgrade their program management team, and force them to undergo weekly immersion.
“Commute to work via buses and jeepneys, certified by jeepney drivers,” he said.
