Looking to untangle the gridlock between government and transport stakeholders over the public-utility vehicle (PUV) modernization program, Sen. Grace Poe has proposed the consideration of easier financing options to repay loans for new public-transport vehicles, including increasing the subsidy level of P80,000 per unit that was initially offered.
The senator pushed for a higher subsidy rate, citing concerns of transport groups on the difficulty of servicing the loans they will take out to acquire the new vehicles offered to replace their old jeepneys.
Presiding over the hearing of the Senate Public Services Committee, Poe thanked transport leaders for putting off their threat to mount a protest-strike on December 4 and 5 against the planned modernization, heeding Poe’s pledge to “broker a full dialogue between the drivers and the Department of Transportation [DOTr].”
Restive transport groups indicated the strike was their “only option left” after DOTr insisted on rolling out the ambitious PUV program in 2018—with “little preparation by way of institutional reforms, availability of the modern vehicles replacing the jeepneys and the financial unpreparedness of small operators and drivers.”
Leaders of the transport groups voiced fears of facing “bankruptcy in trying to repay the loans” estimated at P1.6 million to P2.1 million for units costing a little over P1 million on cash basis.
They were earlier informed that, under the Duterte administration’s PUV program, the government would offer equity on the loans—or a subsidy of P80,000 per unit—to ease the financial burden of borrowers.
But Poe, citing estimates obtained by her Senate office, noted this would mean the jeepney driver-borrower would need to set aside P800 daily just for repaying the loan for the next seven years. “This, on top of the driver’s salary to be fixed under the PUV plan and maintenance costs, could make the fiscal impact unbearable,” she added.
“What is fair as equity, if P80,000 is too small?” Poe asked as she wondered aloud if the restive transport leaders would reconsider their opposition if the financial burden were greatly eased.
The senator took note of suggestions that the program must include a “balik jeepney program” that encourages owners of decrepit units to turn in their units for modern and cleaner ones. The proposed scheme should also include a transparent audit by the Land Transportation Regulatory and Franchising Board of all public-utility jeepney (PUJs) available.
Poe cited a suggestions raised by IBON Foundation on distributing the jeeps to existing cooperatives for better consolidation of resources and economies of scale, a measure that is already a key plank of the DOTr blueprint.
IBON also suggested that payment terms must be reasonable.
Under the proposal, the government can enter into 10-year loan agreement with cooperatives, as part of the financial dispersal. IBON said the government can take the budget for higher subsidies from realignments. It estimated that at 50-percent subsidy of the loan value, the government would have to shell out P700,000 per unit. The total cost for subsidizing the purchase of 234,000 new PUV units would then come up to P63 billion, IBON said.
Poe found the numbers reasonable, even as she said the proposal of some groups for state banks like the Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP) not to impose any interest is not tenable.
“You can’t have 0-percent interest; it’s not fair to LandBank or DBP. [They’d have to charge something] but definitely not 6-percent [interest, either].”
“Come to think of it, if the government is subsidizing trains run by rich companies to the tune of billions, then why should it allow jeepney drivers and operators to foot the bill for new units almost all by themselves?” Poe told reporters after the hearing, adding that, “If PPP [public-private partnership] grantees are given incentives, in amounts with dizzying number of zeros, and are hailed as patriots, then why are jeepney drivers, who are asking for a little more help, treated as pests?”
2 comments
Looking forward na maayos na thank you Senator Grace sa effort na maayos po ito
Sana maging fair both parties ang kasunduan na mangyayari walang mas nakakalamang