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Nine more commodities cleared to adjust prices by Trade dep’t

PHILIPPINE STAR/MIGUEL DE GUZMAN

By Justine Irish D. Tabile, Reporter

THE Department of Trade and Industry (DTI) said on Wednesday that it has approved price adjustments for nine more products that are subject to its suggested retail price (SRP) scheme.

Citing to the newly released SRP bulletin, Trade Assistant Secretary for Consumer Protection Amanda F. Nograles said the second batch of price increases follows an initial group of nine stock keeping units (SKUs) approved to adjust prices on Jan. 12.

She was speaking on the sidelines of the National Price Coordinating Council on Wednesday.

“These are not yet updated on the website as we are waiting on the manufacturers’ signal that they have already implemented the increases,” Ms. Nograles said.

“The nine price increases approved on the 17th are composed of four canned sardine products, one powdered milk product and four toilet soaps,” she added.

The canned sardine adjustments were 14-15%, that of powdered was 9% or P70.75 increase, and the adjustment for the four toilet soaps was 10%.

The DTI is set to review 45 more SKUs which have pending price adjustment applications. The candidates for price hikes form the bulk of the 63 SKUs it said it will review for price increases this year.

The government had asked producers to hold off on increasing prices before the end of 2023, to minimize the impact on inflation.

Ms. Nograles said that the commodities to be reviewed are powdered milk, bread, instant noodles, bottled water, processed canned meat and canned beef, condiments, candles and batteries.

“(For the pending approvals), the largest price increase will be around P30, and the smallest price increase will be 30 centavos which is for instant noodles,” she said.

“But our condiments will also have small increases (of) 55-60 centavos, some 55 centavos,” she added.

The DTI said early this year that it is expecting price hikes to average 6% this year, against the 10% average increase in 2023.

The DTI is hoping to approve all pending price adjustment applications by March which is also when it is targeting to release the fully updated SRP bulletin.

Meanwhile, Ms. Nograles said that the department is studying a policy that will help address misinformation in cases of so-called “shrinkflation,” — the practice of reducing the size of a product while maintaining the price.

“We are currently studying whether we could come up with a policy which will require notification when there are changes in the weight of a product without changes in the price,” she said.

“We observed that there is not much difference in the packaging of products with 2 grams difference or in the size of a 155-gram canned product versus 130 grams,” she added.

“If the manufacturers are to implement this, they have to put the signage on the packaging, labeling and for retailers to put the notices on the shelves,” she said.

“We are looking at implementing this through an administrative order,” she added.

Aside from addressing shrinkflation, the DTI is also studying whether to release SRP bulletins only during calamities, with the market to be allowed to decide prices for the most part.

Bid to void Japan trade deal fails as SC rejects waste import claim

BW FILE PHOTO

THE Supreme Court (SC) has dismissed a petition seeking to void the Senate’s concurrence in the Japan-Philippines Economic Partnership Agreement (JPEPA), rejecting claims that the trade deal will facilitate imports of toxic waste.

In a 95-page decision, the High Court said the provisions contained in the Senate-ratified free trade agreement did not violate the Constitution, adding that JPEPA’s provisions were above board.

The Initiatives for Dialogue and Empowerment through Alternative Legal Services, Inc. (IDEALS), one of the groups that filed the petition, argued that JPEPA violated the right to health and to a balanced and healthful ecology under the Constitution by allowing the “indiscriminate importation of toxic and hazardous wastes in the country.”

“Contrary to the contention of petitioners, the preferential tariff treatment given to these products (scrap and waste, raw materials derived from manufacturing) does not equate to the indiscriminate importation of toxic and hazardous wastes into the Philippines,” the SC said.

“JPEPA acknowledges that the parties are entitled to adopt and implement policies necessary to protect the health of their people and the environment.”

The tribunal added that former Japanese Foreign Minister Taro Aso had committed not to export toxic waste to the Philippines.

The group said the free trade deal also violated Executive Order No. 156, which governs the motor vehicle development program, for allowing the entry of used four-wheeled motor vehicles into the Philippines.

The court disagreed, saying JPEPA abides by the Land Transportation Office’s emissions standards when allowing the entry of used vehicles.

Public consultations were also alleged to be insufficient, failing to consider the views of various stakeholders, the petitioners said.

“These are questions of fact that require a formal trial,” the High Court said, referring to the consultation argument.

In a 2002 visit to the Philippines, former Japanese Prime Minister Junichiro Koizumi proposed a framework for a bilateral trade agreement that would lead to the removal of tariffs on certain fruits, vehicles, steel products, electric appliances, and garments.

Negotiations for the trade pact started in February 2004 during the administration of former President Gloria Macapagal-Arroyo. The deal was signed two years later.

The Senate concurred with JPEPA’s ratification in 2008 after several hearings conducted by the committees on foreign relations, trade and commerce. — John Victor D. Ordoñez

Sugar harvest likely to come in under target

PHILSTAR FILE PHOTO

By Adrian H. Halili, Reporter

THE Sugar Regulatory Administration (SRA) said the Philippines is unlikely to hit its sugar harvest target during the current crop year.

SRA Administrator Pablo Luis S. Azcona told reporters that the harvest is on pace to come in below the 1.85 million metric ton target set before the start of the milling season.

The regulator had projected a 10-15% decline in raw sugar production due to El Niño.

“What is alarming also is that a lot of our farmers are complaining of a lower yield this year due to the weather patterns, and the south of Negros has been very dry in the last two or three months. So, we already see the effects,” Mr. Azcona said.

“I don’t think we will hit 1.85 million MT, the way it is going now,” he added.

The government weather service, known as PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), said that the effects of El Niño may run until the second quarter. An estimated 63 provinces will experience droughts or dry spells.

He said the preliminary estimate for the sugar harvest is now 1.75 million MT.

“During the review, we noted a drop. The estimate will come out soon but based on preliminary estimates, and of millers (output will fall) to about 1.75 million MT,” he added.

The SRA said that the sugar industry has harvested about 1 million metric tons of sugarcane as of Jan. 15. This translates to about 60% of the total harvest for the crop year.

“(What we are) doing now is write millers to check their individual milling districts, how much sugarcane is still standing… when we get that data, we will have a more accurate estimate of what percentage is left,” Mr. Azcona said.

Local government tax collections exceed P200 billion in 2022 — DILG

BW FILE PHOTO

TAX COLLECTIONS at the local level exceeded P200 billion in 2022 following efforts to simplify business processes via digitalization, the Department of the Interior and Local Government (DILG) said.

It added that its digitalization program has a 60% compliance rate among local government units (LGUs), with 921 cities and municipalities deemed digital-ready. Of these, 799 have adopted the National Government’s e-LGU system while the rest have their own systems, Secretary Benjamin de Castro Abalos, Jr. said at a Palace briefing.

Mr. Abalos said LGU tax collections had been P50 billion in 2018.

“It is really important to simplify the process (by going) digital,” he said.

He said the number of registered businesses nationwide rose to 4.4 million in 2022 from 1.5 million in 2018.

In Metro Manila, all LGUs have put up one-stop shops for business permits, Mr. Abalos noted.

He said 14 out 17 LGUs in the capital region have automated their systems and institutionalized online tax payment.

The e-LGU system, which was created by the Department of Information and Communications Technology (DICT), offers business licensing and local tax processing, among others.

At the same briefing, DICT Undersecretary David Almirol, Jr. said the government seeks to install more Wi-Fi sites at the local level to complement the e–LGU system.

About 25,000 free Wi-Fi sites were established last year, he said.

“There’s this pronouncement of the President that digital transformation is one of the keys to full economic recovery,” Mr. Abalos said, citing a Tuesday meeting with President Ferdinand R. Marcos, Jr. at the Palace. — Kyle Aristophere T. Atienza

Strong investor demand forecast for setting up PHL BPO operations

SIXELEVEN GLOBAL SERVICES

THE information technology and business process management industry sees sustained demand for investment in its industry, injecting an element of confidence in its staffing and market share forecasts, the industry association said.

The IT and Business Process Association of the Philippines (IBPAP), whose members are also known as business process outsourcing (BPO) companies), described interest in the Philippines as “continuing,” both for prospective and current BPO operators.

IBPAP President Jack Madrid said in a briefing on Wednesday that the major metrics for industry growth are within reach. 

“We have achieved our annual targets so far. We are confident that we will cross 1.8 million this year and fairly confident, based on our present trajectory that we will cross 2 million,” Mr. Madrid added.

The organization has said that the industry is poised to grow its workforce to 2.5 million by the end of 2028.

In 2023, the industry grew its staffing levels to 1.7 million, producing $35 billion in revenue.

The industry is targeting 7-8% growth in headcount this year, with revenue of $39 billion.

“It is really the demand that we can barely keep up with, but also the very positive demographics that we have,” he said. “We will grow, but the question is, can we maximize our growth?”

Mr. Madrid said that the industry is continually facing skills challenges servicing its markets.

“We grew 8% this year maybe we could have grown a little more if we had more talent,” he added.

“Our challenge is in supplying the badly needed talent for us to defend and increase our market share,” he said.

The market share of Philippines is currently 18% as of the end of 2023, behind India.

“This only highlights how major an economic pillar we are; if we achieve all our goals, we will increase from an 8% contribution (to the economy) to 9%,” Mr. Madrid said. — Adrian H. Halili

Funding for protective services exceeded P47B in 2023

Families do their chores in front of their shanties along a road in Tondo, Manila, Aug. 21, 2022. — PHILIPPINE STAR/ MIGUEL ANTONIO DE GUZMAN

THE Department of Budget and Management (DBM) said it released P47.5 billion for social aid programs targeted at vulnerable individuals and families in 2023.

The funds supported the Protective Services for Individuals and Families in Difficult Circumstances (PSIFDC) program last year.

“This substantial funding aimed at providing crucial support to the implementation of the PSIFDC program, which encompasses a range of services intended to alleviate the burdens faced by individuals and families in crisis,” the DBM said.

Under the program, medical, funeral, educational, transportation, food, and cash assistance is provided to individuals in crisis situations. It aims to “help Filipinos who find themselves in dire circumstances whether due to illness, loss, or other challenges.”

This year’s budget allocates P34.27 billion for the program, which is expected to benefit around 3.9 million people.

“We will remain committed to uplifting the lives of our countrymen, especially the most vulnerable, through supporting targeted social assistance programs,” Budget Secretary Amenah F. Pangandaman said. — Luisa Maria Jacinta C. Jocson

Power generators asked to explain high level of unscheduled outages

BW FILE PHOTO

THE Energy Regulatory Commission (ERC) said on Wednesday that it has asked some generation companies (GenCos) to explain why their unplanned outages have exceeded allowed levels.

In a statement on Wednesday, the ERC said it issued 65 notices of non-compliance with orders to explain (NNCOE) on Dec. 29 against some GenCos which had exceeded acceptable limits for unplanned outages.

The reliability index in force since 2020 sets a maximum number per year for planned and unplanned outages, subject to variation by generating plant technology.

A power plant running on pulverized coal has an outage allowance of 44.7 days a year — 27.9 days planned outages and 16.8 days unplanned.

A circulating fluidized bed power plant should not be out of service for more than 29.2 days — including 6.5 days planned and 22.7 days unplanned.

Under a resolution issued by the ERC in 2020, GenCos are required to submit an event report to the Commission for planned and unplanned outages of generating facilities/units, within 48 hours from the event.

GenCos are also required to submit a weekly summary report to the ERC every Tuesday of the following week declaring outage events at their facilities.

“The ERC Resolution was issued pursuant to the Philippine Grid Code that requires a system of recording and reporting of Grid Reliability determined through a set of indicators,” the Commission said.

According to the ERC, it has imposed approximately P60 million in penalties against GenCos for violating the reliability index.

“If the generation companies served with 65 NNCOEs are later found non-compliant, the ERC will likewise impose appropriate sanctions and penalties against the erring power firms in accordance with the rules of the Commission,” the ERC said.

Separately, ERC Chairperson Monalisa C. Dimalanta has called for amendments to Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 “to allow the application of penalties imposed on erring power firms as refunds to consumers inconvenienced by the power outages.” — Sheldeen Joy Talavera

Onion farmgate prices still falling, farmers say

BOC PHOTO

FARMERS said on Wednesday that farmgate prices of onions in Pangasinan, Nueva Ecija and Occidental Mindoro have continued to decline, with some importers apparently bypassing a government freeze on imports that was designed to provide relief to the industry.

The Federation of Free Farmers (FFF) said in a statement that the onion farmers also have to deal with “widespread worm infestation and reduced irrigation arising from depleted water sources.”

FFF President Leonardo Q. Montemayor said that the entry of imports after December violated Department of Agriculture (DA) rules “intended to protect Filipino producers during the harvesting period from January to April.”

The DA suspended onion imports until May to arrest the decline of farmgate prices.

It said the 99 tons imported in early January were shipped in following delays that took their transit time beyond the December deadline.

The DA recently unveiled plans to construct a network of cold storage facilities. It had allocated P5 billion for the project in the next three years.

The FFF also urged the Philippine Crop Insurance Corp. to be more active in providing coverage to onion producers.

“Traders are claiming that recent onion imports are causing them to buy from farmers at low prices,” Rodolfo Camacho, an FFF Pangasinan chapter president, said.

“The outbreak of army worms, coupled with reduced groundwater levels caused by El Niño, are also affecting the size, quality and output of onions,” Mr. Camacho added.

The worst of El Niño may extend until the second quarter, affecting 63 provinces with droughts or dry spells, according to PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), the government weather service. — Adrian H. Halili

 

The game-changing RMC No. 5-2024

In September, I wrote about a Supreme Court (SC) case covering the sale of satellite communications services by a non-resident corporation, which may potentially have an impact on the taxation of digital services, or what seems (or seemed to be) a gray area in the Philippine taxation. In that case, the SC ruled that the service fees arising from the transmission of satellite signals from a satellite in outer space and Indonesian control center were considered as Philippine-sourced income and thus, subject to withholding taxes in the Philippines. The SC applied a two-tier approach in making its decision: (1) it determined the source of income, and thereafter, (2) the situs of the source. Considering that the income was only earned upon successful delivery of the satellite signals to the Philippine gateways, and that the equipment making up the gateways was situated in the Philippines, the situs for taxation purposes was deemed to be in the Philippines.

The decision was interesting, to say the least, primarily because it appeared to go against the Philippine tax laws on the situs of services – that income from services are only treated as sourced within the Philippines if these are performed locally. Just this month, the Bureau of Internal Revenue (BIR) released Revenue Memorandum Circular (RMC) No. 5-2024 on the basis of the above decision and laid out new cards on the table. Surprisingly and unfortunately, the RMC has not limited the application of the SC decision to transactions similar to satellite services, but has instead used it as reference to determine the taxability of cross-border services — including those that can be physically performed entirely outside the Philippines.

RMC No. 5-2024 provides a list of existing cross-border services which it deems to be “akin” to the transaction covered by the SC case. The list includes consulting services, IT outsourcing, financial services, telecommunications, engineering and construction, education and training, tourism and hospitality, and other similar services where the services are carried out abroad but the results are used, applied, consumed, or executed in the Philippines. Thus, such services are deemed subject to Philippine income tax/withholding tax and 12% VAT. I should mention that VAT was not even touched upon by the SC in the case.

The concept seems to have been anchored on the SC’s decision where it held that for transactions conducted in different jurisdictions, “it becomes imperative to ascertain whether the stages occurring in the Philippines are so integral to the overall transaction that the business activity would not have been accomplished without them.” On this basis, the RMC focuses on the “benefits-received” theory in determining whether the income is Philippine-sourced, where the place of utilization/consumption of the output or result now appears to be crucial in determining the taxability of a transaction. For this purpose, the RMC seems to consider the utilization or consumption as the economic activity that generates the income, thus giving rise to Philippine taxing rights on the entire amount of income without any clear separation or attribution of revenue for each country.

However, our tax law is not ambiguous on the taxation of services, especially those which arise from physical labor. Under Sections 42 and 108 of the Tax Code, it is very clear that service fees are only considered as sourced within the Philippines and subject to income tax and VAT if the services are performed within the country. Philippine tax literature is likewise replete with court decisions and even BIR rulings upholding that income arising from services rendered outside the Philippines are not subject to Philippine tax. The SC itself has repeatedly held that administrative rules must not go beyond the law that it seeks to implement. I am, thus, very curious on how the RMC has arrived at what seems to be a categorical imposition of Philippine tax on offshore services rendered to Philippine residents.

Interestingly, the RMC does not mention how it will be applied in instances where the counterparty is a resident of a tax treaty country, unlike the SC decision which takes cognizance of tax treaties (but were not applied since the case involved a non-resident entity from Bermuda, a country with no existing tax treaty with the Philippines). Tax treaties are bilateral tax agreements between countries. Generally, if certain conditions under the treaty are met, income derived by the foreign income earner from Philippine sources would be exempt from Philippine tax. Since tax treaties are international agreements which have the force and effect of law, I believe that even though the RMC is silent, residents of treaty countries may be protected from the RMC’s ramifications if there is applicable treaty relief. Applying the RMC, however, affected foreign taxpayers will be subject to similar administrative requirements as other taxpayers seeking tax treaty relief.

The RMC likewise does not cover the tax implications if the situation were reversed — how do we apply it to export services by Philippine entities? For income tax purposes, it may not have a significant impact on domestic corporations which are taxed based on worldwide income. However, how would it affect resident foreign corporations which are only taxed on Philippine-sourced income? By applying the benefits-received principle in the RMC, does it mean that if a branch of a foreign corporation were to render services in the Philippines for a foreign customer, the situs of the services would likewise be in the foreign country where the customer is and therefore the revenue is not subject to Philippine tax?  Similarly for VAT, can we consider the mere consumption of the output/product outside the Philippines as a basis for exemption?   

Previously, the SC decision’s potential impact was anticipated to possibly affect the taxation of foreign digital services consumed in the Philippines. Before the issuance of the RMC, digital services were considered a gap in our system, which pushed legislators to draft laws to address such shortcomings. With the RMC, it seems the enactment of a formal law taxing digital services, which Congress has been working on for the past few years, has become moot. Considering, however, that the RMC did not stem from a new law, there is an increasing concern among taxpayers that the rules provided would be applied retrospectively by the BIR, particularly in ongoing tax audits.

The issuance of this RMC has not only touched upon the digital realm, but has also trod outside Philippine waters. Non-residents who are currently providing or those planning to provide services to Philippine customers must take note of this, even if they have no physical presence in the Philippines. While we await (and hope for) further clarification, local income payors, as the agents who are primarily liable to withhold taxes on their payments to non-residents, must also now carefully review their transactions to ensure that they comply with the new requirements. The RMC is clear in its intention — it wants to change the rules of the game.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Olivia Erika Susa is a senior manager at the Tax Services department of Isla Lipana & Co., the Philippine member firm of PricewaterhouseCoopers global network.

olivia.erika.susa@pwc.com

Marcos pushes easing Charter limits but bucks foreign ownership of land

PRESIDENT Ferdinand R. Marcos, Jr. wants the power to grant and approve tax incentives to be returned to investment promotion agencies, a lawmaker said. — PHILIPPINE STAR/KRIZ JOHN ROSALES

PHILIPPINE President Ferdinand R. Marcos, Jr. on Tuesday backed moves to amend economic provisions of the country’s 36-year-old Constitution, which he said was “not written for a globalized world.”

The President, however, was critical of proposals to allow full foreign ownership of land, media and power generation.

There are strategic areas that “we cannot allow to be influenced by foreign entities, be it a corporation or another country,” he told GMA News. “That’s what we have to decide, where we draw the line and how much.”

Mr. Marcos said allowing foreigners to fully own land could drive property prices up, leaving citizens unable to pay real estate tax. “I don’t think I agree with that.”

The 1987 Constitution limits land ownership to Filipino citizens and corporations that are at least 60% Filipino-owned.

Analysts urged the government to study whether pursuing all-out economic liberalization would benefit the country.

Think tank IBON Foundation urged the government to look at how developed countries including the United States have pursued protectionist policies in recent years to expand their industrial base.

“Trade protectionism is more dominant than liberalization among new state interventions today, with the US implementing the most protectionist measures in the past 15 years,” IBON Executive Director Jose Enrique “Sonny” A. Africa said in a Facebook Messenger chat. “Investment restrictions and regulations have also unambiguously been on the rise over that same period.”

He said protectionism, which has been pursued by industrial powers to develop their semiconductors, renewable energy and other critical technologies and infrastructure, is even more pressing for the Philippines.

For example, manufacturing is 100% open to foreigners and there’s about $17 billion in foreign investment in the domestic sector today, “and yet Philippine manufacturing has fallen to its smallest (17.6%) since 1949, and its employment share to the smallest (7.3%) on record,” Mr. Africa said.

“There’s been increasing skepticism that corporate-driven globalization policies really benefit the majority and not just big businesses,” Joseph F. Purugganan, convenor of Trade Justice Pilipinas, said via Messenger chat.

“Ensuring that benefits of economic development redound to the working classes — farmers, fishers, workers, indigenous peoples — should be the framework.”

But Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said the Philippines needs foreign direct investments not only to increase capital in the face of mounting debt “but more importantly to be part of the evolving reconfiguration of the global value chain after a coronavirus pandemic.”

“Participating in global value chains exposes the country to new technologies that are crucial in reaching upper middle-income status by 2025,” he said via Messenger chat.

“While we can learn and adopt new technologies in our own way, participation in the global value chain is a short-cut or detour for making this a reality quickly.”

‘PEOPLE’S INITIATIVE’
A survey conducted by Octa Research on Dec. 10 to 14 showed that amending the 1987 Constitution was not a major concern of the public, with only 1% of adult Filipinos thinking Charter change (“Cha-cha”) was urgent.

Meanwhile, a people’s initiative has obtained enough signatures to start changes to the 1987 Constitution, Albay Rep. Jose Ma. Clemente S. Salceda told reporters. “As of last night, we’ve reached the 12.1% threshold.”

The Constitution may be amended either through a constitutional convention composed of delegates, by Congress sitting as a constituent assembly or through a people’s initiative.

Under the law, the signatures must account for at least 12% of voters nationwide and 3% of voters in each legislative district. The Supreme Court rejected a similar campaign in 1997 in the absence of an enabling law.

Any proposed amendments or revisions must be ratified by majority of Filipinos in a plebiscite.

Philippine senators on Tuesday opposed a proposal for both chambers of Congress to vote jointly to change the Constitution, saying senators could not cast meaningful votes against more than 300 congressmen.

“If this people’s initiative prospers, further changes in the Constitution will open the floodgates to a wave of amendments and revisions that will erode the nation as we know it,” according to a statement signed by all senators and read by Senate President Juan Miguel F. Zubiri in plenary.

Last week, Mr. Zubiri said President Ferdinand R. Marcos, Jr. had asked the upper chamber to lead the review of the Constitution’s economic provisions, saying the President thought a people’s initiative push was too divisive.

The Senate president said a joint voting on charter change would “destabilize the system of checks and balances.”

Senator Joseph Victor G. Ejercito on Wednesday warned of a constitutional crisis, while Senator Juan Edgardo “Sonny” M. Angara said “it’s clear that the people’s initiative is not a genuine people’s initiative.”

But Mr. Salceda said the people have spoken and the Senate should respect their decision, amid allegations that voters were paid in exchange for their signatures. He said about 20% of voters in his district signed the petition.

The President on Tuesday said he expects the Commission on Elections to verify if voters had been paid to support the people’s initiative. — Kyle Aristophere T. Atienza and B.M.D. Cruz

Marcos gives jeepney operators three more months to consolidate

PHILIPPINE STAR/WALTER BOLLOZOS

PRESIDENT Ferdinand R. Marcos, Jr. has approved the Transportation department’s proposal to give jeepney and other public utility vehicle (PUV) operators three more months to consolidate under the state’s modernization plan.

The deadline was extended to April 30 from Jan. 31, the presidential palace said in a statement on Wednesday.

“This extension is to give an opportunity to those who expressed the intention to consolidate but did not make the previous cut-off,” Presidential Communications Office chief Cheloy Velicaria-Garafil said.

The House of Representatives transportation committee on Wednesday drafted a resolution asking the President to extend the deadline to protect stakeholders and commuters.

The lawmakers said the intention of the modernization program is beyond question and the plan is long overdue.

But “the needed reforms must be done in accordance with the law and due process to ensure the protection of the affected stakeholders and the riding public in general,” according to a copy of the draft resolution. It did not specify a new deadline.

“The very essence of the resolution is to reconsider the implementation of a consolidation deadline,” Santa Rosa City Rep. Dan S. Fernandez, who moved for the filing of the resolution, told a hearing on Wednesday.

Unconsolidated PUVs originally had until Jan. 31 to operate, or a month after the year-end consolidation deadline.

The committee approved Mr. Fernandez’s motion to ask the President and Transportation department to consider extending the deadline “until the government can come up with a concrete plan to address the major issues in the implementation of the program.”

More than 300 public utility jeepney (PUJ) routes and 76 UV Express routes in Metro Manila alone have not been consolidated, according to the Land Transportation Franchising and Regulatory Board (LTFRB) website.

About 38,000 jeepney drivers could lose their jobs next month when the PUV modernization program takes effect, LTFRB Chairman Teofilo E. Guadiz III said on Jan. 10.

“If we’re not allowed to operate by Feb. 1, what will we feed our families?” Lito Andal, who heads a group of jeepney drivers based in central Luzon, told the House hearing in Filipino. “This is the only job that we know.”

Transport group Pinagkaisang Samahan ng mga Tsuper at Operators Nationwide (PISTON) urged the government to focus on supporting local manufacturers of modern jeepneys if it really wants to modernize public transportation.

The modernization plan would likely lead to fare increases, PISTON President Mody T. Floranda told congressmen. 

Think tank IBON Foundation estimates that PUV fares could increase by as much as P50 in the next five years if modernization takes place. — Kyle Aristophere T. Atienza and Beatriz Marie D. Cruz

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