What you should know about the jeepney phaseout program


The government calls it modernization. Transport groups believe it to be a phaseout scheme to allow the takeover of private businesses in the transport industry. Manila Today weighs in on the issue by looking at the facts about the PUV modernization program.

1. The PUV modernization program

The Public Utility Vehicle Modernization Program (PUVMP) is the government’s plan to provide Filipino commuters a “safe, adequate, comfortable, and environment-friendly road-based public transportation system”. This program is spearheaded by the Department of Transportation (DOTr) with the Land Transportation Franchising and Regulatory Board (LTFRB) and the Land Transportation Office (LTO).

Under the Omnibus Guidelines on the Planning and Identification of Public Road Transportation Services and Franchise Issuances or Department Order 2017-011 (Omnibus Franchising Guidelines) issued by the DOTr, jeepneys operating for 15 years or more will be scrapped because, as the government claims, these units are no longer road-worthy – the engines aren’t compliant with international standards and thus cause environmental harm. They say the size of the old jeepneys are inadequate, resulting in traffic congestion from passengers rushing to be seated first.

The program also covers buses and public utility vans, but has been giving emphasis on the replacement of ageing jeepneys with new units.

2. Out with the old, in with the new

We may have to say goodbye to the iconic post-war jeepney. In an expo organized late last year by the DOTr and the Department of Trade and Industry, the riding public had a peek at the new jeepney’s design. The 22-seater vehicle, from which passengers enter and exit at the side, is equipped with a Global Navigation Satellite System (GNSS) receiver, free Wi-Fi, closed circuit television (CCTV), an automatic fare collection system, a speed limiter, and a dashboard camera. The units have Euro 4-compliant engines or solar panels on the roof for electrically-powered ones.

Of course, all this comes with a hefty price. While drivers and small operators recognize the need for maintaining the safety and road-worthiness of their jeepneys, they can’t afford the e-jeeps – P1.4 million to P1.6 million for air-conditioned units; P1.1 million to P1.4 million for non-air-conditioned units; up to P1.6 million for solar-powered units; and P1 million to P1.5 million for units with Euro 4 engines. That’s more than twice the amount they shell out for the traditional jeep.

Pinagkaisang Samahan ng mga Tsuper at Operator Nationwide (PISTON) casts doubt on the durability of the new jeepneys. According to the transport group, these new units can’t compete with the traditional ones’ capacity to carry heavy loads, as well as their endurance to floods and long (almost 24-hour) shifts. It can be recalled that in 2015, a City Optimized Managed Electric Transport (COMET) caught fire and burned down in the middle of transporting passengers in Quezon City.

3. Fleet management

Operators will be needing a minimum capital of P20 million for its fleet of new jeepneys. Under the Omnibus Franchising Guidelines, only operators with a minimum of 20 units will be granted a franchise. The minimum requirement will be 40 units by 2019. The DOTr asserts that grouping operators under “bigger and coordinated” fleets would be beneficial to drivers and operators by collectivizing services such as repair, maintenance, cleaning and by giving operators discounts on fuel and spare parts. Operators owning larger fleets will be given incentives and higher priority.

The OFG in essence transforms the scale of operation from small operators owning a single unit or a small fleet into private corporations handling a large fleet.

PISTON’s George San Mateo sees the DOTr’s move as a form of union busting. He argues that given the militant history of transport groups, corporate takeover of public transport would result in the suppression of drivers’ and the riding public’s rights.

San Mateo adds: “Kikita na nga ang mga malalaking korporasyon, mahahawakan pa nila ang mga asosasyon at samahan.”

(Not only do big corporations profit from [the jeepney phaseout]; they get to have the upper hand over [driver-operator] associations.)

4. Salary system and work benefits

The PUV modernization program also introduces to drivers a monthly salary system with work benefits. Instead of following the “boundary” system, where drivers need to earn a quota every driving shift, drivers will become salaried workers of corporate fleet heads.

Piston, while amenable to drivers being salaried workers under a nationalized transport system, decries the proposal. Thing is, the PUV modernization program is antithetical to a nationalized transport system.

“Mag magiging matindi ang pagsasamantala sa mga tsuper sa ilalim ng salary system. Sa kasalukuyang kondisyon ng paggawa sa Pilipinas, hindi magiging regular na manggagawa ang mga tsuper dahil mababa ang compliance sa regularisasyon. Kailangang itrato ang mga jeepney driver bilang mga regular na kawani ng gobyerno dahil public utility ang transportasyon,” argues San Mateo.

(Exploitation experienced by the drivers will worsen under the salary system. Given current labor conditions in the Philippines, drivers won’t become regular workers because the compliance rate for regularizing workers is low. Drivers need to be treated as regular government workers because transportation is a public utility.)

The transport group also contends that a quota system still exists under a fleet management structure. This subjects drivers to high quotas, meaning, they will have to work longer hours in order to receive their wages.

Some jeepney drivers may not have a chance to drive those new jeepneys, as there is an educational and age requirement under fleet management.

5. Route rationalization

With the ultimate aim of decongesting traffic in urban areas, the modernization program will also implement the rationalization of routes in accordance with local government units’ public transport plans. This scheme will determine the most suitable mode of transportation for a particular route depending on passenger demand and existing road networks.

The OFG also closes or shortens traditional PUV routes – restricting jeepneys on major roads – making way for the light rail transit and rapid bus transit. This puts the PUVs in danger of being displaced along these routes.

6. Loans and government support

The PUV modernization program’s proponents teamed up with the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) with the aim of providing loans for drivers and operators wanting to acquire the new jeepneys with prices ranging from P1.1 million to P1.6 million. The government likewise approved a P2.2 million subsidy for the equity of jeepney loans of 28,000 drivers/ operators. The borrowers can avail P80,000 in subsidy through the LBP.

By the LBP’s estimates, it could give loans for 650 to 700 units. The DBP calculates its P1.5 loan portfolio to acquire around 700 to 900 PUV units. The borrowers can own the jeepney, but only after seven years of turning over P800 a day at 6% interest. The bank will pay up to 95% of the cost of acquiring the unit and the borrower will pay 5% as equity.

Piston asserts that it will be a burden to drivers/ operators to pay P800 a day for seven years. It is already hard for them to make ends meet given the current P450 boundary, the group argues.

7. Tanggal Bulok, Tanggal Usok

Just this January, the Inter-Agency Council on Traffic  (i-ACT) started with their campaign to check PUVs’ roadworthiness. The campaign, called ‘Tanggal Bulok, Tanggal Usok’, aims to go after jeepneys that do not comply with road safety standards.

For PISTON, ‘Tanggal Bulok, Tanggal Usok’ is a covert attempt by the government to implement jeepney phaseout. The groups says that if the DOTr were earnest in making jeepneys roadworthy, they should give drivers and operators some leeway to make repairs on their vehicles instead of immediately charging fines or having their jeepneys impounded.

The riding public has been vocal about the government not having planned well enough amid the shortage of jeepneys on Metro Manila streets.

8. Corporate capture and service to foreign interests

Think tank IBON warns that while the jeepney phaseout will scrap 250,000 jeepneys, it would mean big business to foreign manufacturers and the government. Replacing 250,000 jeepneys spells a market of P300 billion given the minimum P1.2 million to manufacture a new unit. The new vehicles’ main parts will still be imported from foreign companies like Hino, Isuzu, Fuso, and Foton. Euro IV engines will come from India, China, and Japan. One of the biggest companies specializing in e-jeepneys is a Taiwanese Company.

The monopolization and corporatization of public transport ultimately serves the neoliberal economic framework of the Duterte administration. Drivers and operators put the concept of neoliberalism simply: anti-people policies and more profit for the rich at the expense of the poor.

9. Who will be affected?

The Crispin B. Beltran Resource Center (CBBRC) estimates that the jeepney phaseout will affect 500,000 drivers, 300,000 operators, and around two million of their family members.

The phaseout will cause massive displacement or unemployment of drivers. Many drivers will not be able to pass certain requirements like age, educational attainment, and exams.

Fare hikes will be unavoidable. According to the CBBRC, minimum jeepney fare is pegged to increase to P12 to P20 once the new units start plying the streets. Commuters as early as now have been airing their concern over inevitable fare hikes while wages and salary remain the same.

The riding public have had the load put on their shoulders because of the government’s practice of turning over mass transport over to private corporations. An example of this is the LRT 1 when the government assured the private sector of fare hikes in exchange for the latter’s handling of train operations and maintenance.

10. Transport strikes

In December last year, PISTON national president George San Mateo was arrested for allegedly violating Commonwealth Act 146 or the Public Service Law. The case arose from a complaint filed by the Land Transportation Franchising and Regulatory Board (LTFRB). According to the complaint, San Mateo overstepped the LTFRB’s Memorandum Circular 2011-04 – stating the revised conditions for the granting of certificates of public convenience – for leading a transport strike in February 2017.

Senator Grace Poe questioned the arrest, saying that citizens have the right to peaceably assemble and that it was unclear what exactly San Mateo violated under the Public Service Law.

The No To Jeepney Phaseout Coalition and PISTON have held several transport strikes last year to protest the government’s PUV modernization program. Malacañang responded by suspending work and classes, something that sparked the ire of Pres. Duterte. He threw profanities at the striking drivers and told them that he did not care if they went hungry.

While the government is taking a small step forward in its intention to make public transport safer and more efficient, it is taking two steps back by failing to take into account the millions that will be adversely affected by loss of livelihood and higher fares.

Our interviews with jeepney drivers and operators reveal that they are not against modernization, but they worry that the government’s definition of modernization excludes them, the very ones who help the riding public move to and from schools, workplaces, and elsewhere. It seems that the government’s modernization program gives priority to profit and service to big corporations.

The government’s modernization program is essentially a jeepney phaseout program and also a phaseout of the livelihood of hundreds of thousands to favor a moneyed few. The extent to which this is true may be seen in the immediate effects, such as the denial of the jeepneys in question on the roads, loss of livelihood, insufficient public transport that has so far worsened the commute experience and sure sales of up to 200,000 or more new ‘jeep’ units in place of those to be phased out, a big marketing program as in the words of Piston leaders.

While the intention to modernize may be well-meaning, it leaves behind most of its stakeholders: the ordinary Filipino drivers and the riding public. Modernization—likewise development programs introduced by the government—should put the majority of people concerned at the core of its program and beneficiaries, otherwise it be criticized or revealed as another money-making scheme to benefit the few rich or foreign business interests facilitated by those currently in seats of power.

In this modernization plan, not only new technology is needed, but also industrialization. The country do not just need to buy from other countries and be a market where they dump their goods, but be able to create and develop its own.

Ultimately, the modernization program still does not cater or lead to a program for a national mass transport system that includes a comprehensive nationwide system of land, sea and air transport combined with the train systems. A national mass transport system may also bolster industrialization.

In the end, we emphasize, transportation is an obligation of the government to the people. It is a public service. At this juncture of wanting to modernize public transport, may the government look to support local industry and push for industrialization and not privatization and private profit.


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