By Rene S. Santiago
THE obituary for the 65-year-old jeepney was publicly announced by President Rodrigo Duterte when he said in October 2017: “Jan. 1. If you can’t modernize that, leave. You’re poor? Son of a bitch, go ahead, suffer in poverty and hunger, I don’t care.”
Two months later, his Transport secretary pivoted — or corrected? — the President from the 2018 deadline to a three-year transition period.
Will the jeepney finally disappear on Philippine roads in 2021, or 3 years from now?
Not by a long shot.
MODERNIZATION À LA KING CANUTE
The Department of Transportation (DoTr) unveiled its Public Utility Vehicle Modernization (PUVM) program in June 2017, via a Department Order labelled as “Omnibus Guidelines on Route Identification and Franchise Issuance,” composed of 10 components ranging from regulatory reform and route planning to financing and fleet modernization.
The program reminds me of the 12th century story of King Canute who ordered the waves to recede. But in this case, the department order commands the jeepney to transform itself, or else vanish into the night.
OMEN OF FAILURE
If left alone, the PUVM is bound to fail. Off the bat, it is already sending out confused signals — a failure of its communication component.
The DoTr says phaseout will start in 2018, via the Motor Vehicle Inspection System (MVIS) but also says on the same breath that there is a three-year transition period. The LTFRB was more realistic in saying “no phase-out in 2018.”
The MVIS is not being launched in 2018 as a tool of PUVM; it has been there since 1985. MVIS is a system for annual checkup on the roadworthiness of a motor vehicle — public and private — before its annual registration is renewed by LTO. You don’t MVIS to check a vehicle’s age. Failure to pass a test, such as emission, does not prevent a vehicle from coming back for a second test. Or a third. Moreover, if age is the criterion, more than 90% of the jeepneys will disappear overnight, in 2018, without any replacement. A formula for disaster.
REALITY BITES
The jeepney modernization may yet succeed, where previous administrations have dared not tread.
Let me point out some of the bumps on road to jeepney modernization.
First is the supply constraint.
Replacing the 234,739 jeepneys on the road cannot be done in three years. Local manufacturers have to ramp up vehicle production — to about 78,000 units a year to reach the three-year target. A prototype is different from a production line output. It will take at least a year to build an assembly line, and none would aim for a 78,000 capacity. On a 10-year life cycle, the aggregate production capacity should be about 24 thousand PUVs; or 5,000 average capacity for five manufacturers. Local companies have to reckon with imported CBUs — most likely, from China. Forcing a drastic change in fleet will open the floodgates to importation as to dampen investors’ interest in the BoI’s manufacturing program for the new jeepneys.
Second, local governments must prepare their respective route plans and route rationalizations. There are 145 cities and 1,489 municipalities in the Philippines. Most of them have no capabilities to formulate a route plan.
For Metro Manila alone, the DoTr has commissioned an expert group to craft one; a report came out by the 3rd quarter of 2017, which timidly recommended three routes (out of 600) for pilot implementation of the PUVM!
For Metro Cebu, DoTr sought technical support from JICA and World Bank to produce the required route plans. The outputs may come out no earlier than middle of 2018. Davao City is probably in most advanced stage, simply because it was the recipient of an ongoing ADB technical assistance that predated DoTr’s PUVM.
Under its plan, more than 80 jeepney routes are to be restructured into 29 bus routes. Interestingly, the pathway for transport modernization in Davao deviates considerably from the DoTr’s guidelines. Even in this particular case, where a route plan is complete, implementation will be no earlier than 2020.
Third, a key element of the PUVM is industry consolidation via cooperative. It is a slippery road. After more than 40 years, the transport cooperative program of the government has failed to gain traction. Why would it be any better this time around? The few jeepney coops are basically convenience shops where an omnibus franchise gets parcelled out to “members” for a fee. Industry groups like FEJODAP and PISTON are against drivers and operator merging into cooperatives as a means for PUVM. They should be, as their hegemony — anchored on the quota or boundary system — is threatened by any form of consolidation.
The reality is that thousands of independent Mom-and-Pop operators will not voluntarily merge; organizing them into an organized entity is, to borrow a phrase from Pope Francis, “as hard as cleaning Sphinx with a toothbrush.”
Fourth, financing will not be as quick as setting up a vendo machine.
The Land Bank of the Philippines (LBP) has admitted that their financing package is meant only a “pilot to cover only about 600-700 jeepneys.” Assuming that the Development Bank of the Philippines (DBP) would also have the same scale, that means only 1,300 units per year. Doubling the amount every year would mean about 9,000 units in three years. That is less than 4% of total fleet in 3 years!
There are other problems attendant to the other components of the PUVM. But the above would suffice to say: the jeepney will still be around after 2022, but hopefully fewer in number.
MOVING THE M-IMPERATIVE
As an old solider who fought several battles to improve our public transport system, let me offer some suggestions to make the M-imperative succeed.
For starters, the arrogance of government and jeepney operators must give way to humility. A more realistic timetable may deflate one’s ego, but would lead to a more enduring transformation. Let’s take it one local government unit (LGU) at a time. The pace of change has to be dictated by the LGUs. Not dictated from the top. Let those who find the old jeepneys still usable bask in the old world, while the more visionary mayors lead the way to modern public transport. LGUs must be allowed leeway on the rhythm of change, as well as the paths to modernization. If Davao City can chart its own course, with the consent of LTFRB, then so can the other LGUs.
Consolidation of jeepney operators into cooperatives is nice, but unworkable. Organizational merger is an old management playbook.
In the late 1970s, I pushed for bus consolidation via consortia to achieve desired outcomes — such as coordinated dispatching. It almost succeeded, until the next administration pushed back and retreated.
Today, with digital technologies, there is no need to merge transport operators into one juridical person. One can have common ticketing, pooling of revenues, fleet and crew management without consolidation. Uber and Grab has proven that many independent vehicle owners and drivers can be made to work together via a digital platform.
CASH FOR CLUNKERS
My second recommendation is to adopt a cash-for-clunkers (C-4-C) program, to overcome initial resistance about the viability of the financing scheme.
In 2009, the USA enacted into law a program known as Car Allowance Rebate System (CARS), otherwise known as Cash for Clunkers. It provided financial incentives to car owners to trade in their old, less fuel-efficient vehicles and buy more fuel-efficient vehicles. The P80,000 subsidy offered under the PUVM is mere crumbs. Buy out the old jeepneys outright — say, P500,000 (whatever the condition) in year 1, progressively decreasing on second and third year. Existing jeepney owners can use 100% of the value as down payment for new vehicles, or get 50% of the value if they wish to get out of the business. This subsidy can also be calibrated in proportion to their carbon footprints. To finance the subsidy, the government can use the Vehicle Pollution Control Fund under RA 8794, on top of what Congress shall appropriate in the annual budget. After all, replacing the old with the new is akin to buying clean air.
My third recommendation is about the missing components of the PUVM. One is the inclusion of bus mode; since some of the jeepney routes will get converted into bus routes, aside from the fact that urban buses are also antiquated in their operations. Two is infrastructure support. The government must build the infrastructure facilities for public transport to operate seamlessly in an urban setting, and be an attractive and convenient mode of commuting. I refer to the passenger-interchange facilities, terminals, the waiting sheds, public information system, and traffic priority. Without them, the PUVM is nothing more than a shoot-and-forget program.
FOR WHOM THE BELL TOLLS
Finally, the bell has begun tolling for the jeepney. Disruptive technologies are around the corner. A properly executed PUVM can provide a soft landing, a decent burial for a historic icon. However, the internment will not happen this year. It will be a slow funeral march, maybe slower than ordinary-day traffic on EDSA.
More than a change in appearance and appurtenances, the most revolutionary change would be in the jeepney mentality — from individualistic operation to being part of an urban transit system, no longer an “island unto itself but part of the main.” As I stated before, in the National Academy of Science conference in July 2014, “it is time to let go” of the icon of backwardness, on what it symbolizes — a “heritage of smallness.”
Rene S. Santiago is a Transport Engineer, a Fellow of the Foundation for Economic Freedom, past president of the Transportation Science Society of the Philippines, and the President of Bellwether Advisory, Inc.
