[EXPLAINER] Jeepney modernization: Yay or nay?

THE PHILIPPINE government should take time to study the transport modernization program and execute it properly rather than rush the whole process, according to transport experts and stakeholders.

After public utility jeepney (PUJ) drivers and operators launched a week-long strike early in March in response to the jeepney phaseout plan, the Land Transportation Franchising and Regulatory Board (LTFRB) extended the deadline to consolidate fleets to Dec. 31 from June 30.

The government should not rush the implementation of the program, said Rene S. Santiago, former president of the Transportation Science Society of the Philippines.

“Our jeepney sector evolved for 70 years. You can’t suddenly dismantle and reinvent it just like that,” he told BusinessWorld in a video interview.

Under new cooperatives to be formed before Dec. 31, the Department of Transportation (DoTr) and the LTFRB will be mandating rationalized routes and the replacement of old jeepneys.

The biggest problem is the “faulty financial analysis,” which places the cost of the modern jeepney at P2.5 million each, a steep price even with the government subsidy of P160,000, Mr. Santiago said.

According to LTFRB Technical Division Head Joel J. Bolano, the notion that individual operators will pay the amount is incorrect.

“We require consolidation… so that the consolidated franchise holder, a cooperative or corporation, will be the one to buy the new units, not an individual,” he told BusinessWorld over the phone in Filipino.

The loan subsidy from government banks or financial institutions is P160,000 per modern PUJ unit, while commercial banks can offer up to P360,000.

Transportation Secretary Jaime J. Bautista has said that the cost will be worth it due to the benefits of modern jeepneys, which are designed more like minibuses and have more headroom for passengers.

“The Euro 4 or 5 compliant engines of the new jeepneys will also be ecofriendly,” he said at a press conference. “They will reduce pollution, which is better for the environment.”

For his part, Manibela Chairman Mar S. Valbuena said the transition is the issue, not the new jeepneys.

The DoTr has to assess the routes to determine demand and income, and then manage the transition accordingly, he noted.

He added that if the financial aspect of the program fails, the burden of the expensive modern jeepneys will fall on the commuters, a concern echoed by commuter groups.

“Will the new vehicles arrive within three days of phaseout or will commuters have a hard time getting around because jeepney operators have given up their franchises?” said Primo V. Morillo, convener of The Passenger Forum.

“And, at the end of the day, who will have to pay for the modern jeepneys? It’s the commuters,” he said in an interview.

As of December 2022, the country had around 158,000 PUJs nationwide, according to the LTFRB. This is also the target number of PUJs for the December 2023 consolidation deadline.

“As of today, 62% of those units already consolidated into cooperatives or corporations,” Mr. Bolano said.

The review before the deadline will yield more detailed guidelines for the rest of the PUJ modernization program’s components, he added.

Both DoTr and LTFRB have said that operators, drivers, and commuters will be consulted over the next few months to further iron out the details of the plan.

Interviews by Patricia B. Mirasol and Brontë H. Lacsamana

Produced by Earl R. Lagundino, Joseph Emmanuel L. Garcia, and Arjay L. Balinbin