INVESTING at least P25 billion to modernize public utility vehicles (PUVs) in the Philippines—an initiative that experts say should have been done way back in the 1980s—may sound like a hefty price to pay for the decades of delays in launching the controversial program.
But despite the many qualms raised on the program, studies show that the benefits of having a better public transport sector will far outweigh the costs.
The Philippines is in the midst of a six-year PUV-modernization plan, which aims to replace old jeepney units with low-emission and fuel-efficient vehicles to help reduce air pollution and provide better transportation means for commuters.
It has been on the government’s drawing board for more than a decade now, but has only come into effect last year, when the Duterte administration took a stiffer stance on implementing the program despite oppositions from operators.
Back to the ’80s
For Jose Regin F. Regidor, a research fellow at the University of the Philippines-Diliman National Center for Transportation Studies, the program has long been delayed. The first round of upgrade, he said, should have been done more than three decades ago.
“Modernization should have been undertaken decades ago. Even back in the 1980s there were already viable options for the jeepney to be modernized, but the government skirted the issue for various reasons, including the threats of transport strikes,” he told the BusinessMirror.
Despite playing catch-up with the demands of the modern time, the government is bent on hastening the full implementation of the program due to the worsening public transport conditions in the Philippines marked by dilapidated vehicles, crisscrossing routes and low to zero access.
This political will stems from the fact that the transportation department’s belief that “most public-utility vehicles on the road are not safe, not comfortable and produce significant amounts of air pollution.”
The replacements
Under the program, several agencies under the Department of Transportation, the Department of Trade and Industry and the Department of Finance are to work together to remove old and polluting units, replace them with vehicles with larger volume capacities, and improve the road-worthiness of public utility units.
In a nutshell, the modernization agenda aims to effect a transition from current vehicles plying the road to “high-quality public-transit requisites.” The transportation department listed these items as follows: “higher capacity vehicles, low-emission vehicles, fleet consolidation, reformed business model and an effective information-technology system.”
Initial benefits of the program to commuters are easier access to public transport due to an expanded network that connects different routes and establishments, and the availability of “more reliable” public transportation means.
Health, environment losses
Part of the overall objective of the modernization program is to reduce the amount of carbon footprint that the Philippines produces annually, and help improve the driving methods and techniques of drivers.
In a 2017 study conducted by nonprofit organizations Blacksmith Institute and Clean Air Asia, the Philippines lost roughly $2.5 billion in 2009 due to air pollution—that’s about 1.5 percent of the country’s GDP.
This figure on the so-called silent killer could have ballooned by now.
And PUVs are huge contributors to the air pollution in the Philippines, as these vehicles are often powered by old and dilapidated diesel engines, thus, emitting particulate matters such as carbon monoxide, nitrogen, sulphur oxide and carbon dioxide.
Metro Manila’s air pollution is higher than the guidelines set by the World Health Organization, resulting in about 12,500 deaths—direct and indirect—in 2013.
Likewise, improper and bad driving behaviors from improperly trained drivers have caused deaths from road crashes.
In 2013 the Philippine National Police recorded a total 12,875 road crashes in the Philippines. This figure rose sharply by a fifth the year after to 15,572 road-crash incidents, which then ballooned by 57 percent to 24,565 incidents in 2015. Last year there were about 32,269 road crashes all over the country.
Data from the Metro Manila Accident Recording and Analysis System, on the other hand, showed there were 109,322 road-crash incidents in the National Capital Region in 2016, a 14.33-percent rise from 95,615 road crashes the year prior. Human error—defined as negligence, physical challenges, or distractions—is to blame, according to the data provided by the government.
The estimate of the cost based on the health sector data amounts to P105 billion per year, and it may still be on the low end, as there are many cost components that were not accounted for during the study. This cost is already about 2.6 percent of the Philippines’ GDP, based on a study conducted by Transportation Assistant Secretary Mark Richmund M. de Leon.
Part of the problem is the poor driving behavior and practices of drivers—particularly jeepney drivers.
“The frequent starts and stops, low cruising speeds, long idle times while waiting for passengers, excessive lane changing and high acceleration rates of jeepneys significantly contribute in defining their fuel consumption and emissions,” the study by Blacksmith International and Clean Air Asia noted.
And these vehicles compete for passengers and tend to block one another’s way.
“The main reason behind this behavior lies in the rental nature of jeepney operations. There is no ‘employee and employer relationship’ between drivers and operators where daily salaries are paid,” the study read.
Instead, they receive the net revenue left at the end of the day once fuel and vehicle rental fees are paid to operators, which is colloquially known as the “boundary system.”
The said driving behavior also contributes largely to the sorry state of the engines of utility vehicles.
Low fuel efficiency
And because drivers only make an average of P14,685 monthly, drivers often resolve to improper driving techniques and methods so they can provide more for their families. Note that a household depending solely on a jeepney driver is part of the bottom 40-percent income group.
In a 2018 technical report, the transportation department noted this sad reality. It said that families of drivers and operators usually have three to seven members, who depend in the daily take-home pay for their expenses.
“The waiting time for a new vehicle to arrive, wherein they do not earn anything, is a large factor that prevents them from modernizing,” the report obtained by the BusinessMirror read.
At least 118,000 families, or some 590,000 individuals, depend on the 54,843 jeepneys in Metro Manila alone.
There are about 209,124 jeepneys all over the Philippines.
The “vast majority” of these drivers, because of the meager pay they get from 12 to 14 hours of daily driving, resolve to unfit maintenance practices, such as improper injection system calibration, improper overhauling, wheel misalignment, poor tire balance, low-quality lubrication oils, and engine tampering.
These contribute to fuel wastage and increase in operating cost.
“Jeepneys have poor aerodynamic design and are 25 percent heavier than other vehicles their size,” the transportation department’s report read.
A baseline jeepney has a fuel economy of only 5.65 kilometers per liter (km/L), much lower than the standard for engines running on new technologies that have a fuel economy of 10.05 km/L.
“Jeepneys are spending 76 percent more fuel costs than they should be,” the report read.
Hence, drivers are spending more on fuel than they should have.
Thus, modernizing all jeepneys in the Philippines could directly benefit 540,000 families, or some 2.7 million individuals, through higher incomes, better work conditions and improve the lives of the millions of commuters who endure uncomfortable, unsafe and unhealthy conditions for long periods of time daily.
Costs
According to de Leon, these issues will be addressed by the modernization program through several initiatives, such as fleet modernization, route rationalization and regulatory reforms.
While this could help improve the lives of drivers and commuters, he said, the modernization program can also help fuel the local economy through the savings that may be derived from the said initiative.
“The program will definitely have a positive impact on the economy because of the improvement in accessibility, improvement in economic activities in the area, and reduction of traffic because of improved public transportation,” de Leon told the BusinessMirror.
Under the program to modernize the iconic Filipino jeepney, the government requires drivers and operators to use vehicles equipped with low-emission Euro 4 technology.
Based on current market prices readily available on the Web, a vehicle with such technology ranges from P1 million to P1.5 million.
It will, likewise, require the phasing out of 15-year-old vehicles, as they are found to emit gases harmful to the environment.
The government will help drivers in purchasing new units through a subsidy. It has also tapped government-owned lenders such as the Land Bank of the Philippines and the Development Bank of the Philippines to provide a loan package with low equity and low interest rates.
As a recipient of the benefits of the Comprehensive Tax Reform Program, a total of P20 billion will be downloaded to the transportation department to fund the subsidies it will dole out to jeepney drivers.
“That’s aside from social mechanisms, like training and livelihood programs, which include financial management, fleet management and proper dispatching and maintenance systems,” de Leon said.
Roughly P4.5 billion will be spent on trainings, seminars and education for PUV drivers.
“Modernization, whether in the form of new vehicles to replace old ones or changing the engines of old ones for them to comply with emission and fuel efficiency standards, should improve safety, air quality and fuel efficiency,” Regidor said.
This means less road crashes, injuries and fatalities attributed to public transport.
“Air quality may improve as harmful emissions attributed to public-utility vehicles will also be reduced. And less fuel will be consumed due to more efficient engines,” Regidor said. “The latter should translate to savings and therefore more income for operators and drivers.”
However, in terms of routes and addressing demand, modernization should go with rationalization, he added.
“Rationalization means we have to determine what size and capacity of vehicles, and how many of them are required for each route to be served efficiently. The routes themselves need to be evaluated because we currently have many overlapping routes,” he said.
According to de Leon, the transportation department is currently in cooperation with several local governments across the Philippine archipelago to assist them in developing their route plans for the said rationalization process.
“Within one year we should complete the route rationalization for Metro Manila—actually even shorter than one year. It’ll be this year. In provinces, it is ongoing, we’re not in a rush. We are focusing on would-be missionary routes in the provinces,” he said.
Aside from this, the government will implement a fleet modernization and consolidation initiative, which aims to pool resources from driver-operators to create “fleets” for easier and cheaper maintenance works.
Savings
But all these, according to the report, are justifiable, as the whole program could result in savings of up to P753 billion. Broken down, this will come from fuel savings of P439 billion and health savings of P250 billion.
A modernized fleet will produce significantly less carbon dioxide and particulate matter emissions, thereby reducing both environmental and social costs. This is mainly driven by the shift to Euro 4 standard vehicles, the transportation department’s technical report read.
Annual carbon dioxide emissions will go down by 43 percent from 4.9 million tons to 2.8 million tons, while particulate matter emissions will go down by 79 percent from 4,879 tons to only 1,019 tons, as a result of the program, it added.
Modernizing the jeepney industry will result in billions of social savings from lower fuel, health, infrastructure damage and environmental costs. After 15 years of operation, a Euro 4 jeepney will have saved P3 million, which is almost double its P1.6-million acquisition cost, the report noted.
Despite this, Regidor believes that the government must spell out specifics on how to move with the program.
“On the financing side, the government has offered some options for purchasing a new vehicle, but then there is hesitance among operators to avail themselves of the schemes because it is uncertain if they can pay for the amortization,” he said.
This is perhaps because they have little capital in the first place and would not be able to afford investing in and operating modern transport vehicles, Regidor added.
“Such is the reality where public transport is strongly linked to livelihood of low-income families that cannot be addressed simply by replacing old vehicles with new ones. A more comprehensive approach is necessary to address such issues, where certain operators and drivers actually should not be in the transport business in the first place,” he said.
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