Philippines: After jeepney strikes, what happens next

Manila: The Department of Transportation (DOTr) on Wednesday reported a “significant” increase in applications for consolidation in public transportation.

In a statement, the DOTr attributed the increase in applications to a resolution from the Land Transportation Franchising and Regulatory Board (LTFRB) that allowed applicants to beat the deadline without payment of necessary fees.

However, it called on these applicants to settle these fees for them to be included in the final consolidation report.

“In the meantime that the figures are being finalized, all unconsolidated PUVs (public utility vehicles) may continue operating until January 31, 2024. The LTFRB will issue an appropriate resolution to give effect to this instruction,” the DOTr said.

The move comes after the deadline forthe consolidation of public utility vehicles (PUV) operators will no longer be extended.

On December 12, 2023, Philippine President Ferdinand Marcos Jr sent out a tweet stating: "Today, we held a meeting with transport officials, and it was decided that the deadline for the consolidation of public utility vehicles (PUV) operators will not be extended. Currently, 70 percent of all operators have already committed to and consolidated under the Public Utility Vehicle Modernization Program (PUVMP).

"We cannot let the minority cause further delays, affecting majority of our operators, banks, financial institutions, and the public at large. Adhering to the current timeline ensures that everyone can reap the benefits of the full operationalisation of our modernized public transport system. Hence, the scheduled timeline will not be moved."

The move is seen by many as a big win for the Filipino commuters, unshackling the riding public from the perpetual threats of transport strike and deadline extension. The move is seen bring more comfort and safety to commuters and the general public who are forced to ride in run-down vehicles, sometimes up to 20 year-old jeepneys that are often powered by even older diesel engines.

Provisional authority

Under LTFRB Memorandum Circular (MC) 2023-051 issued on Dec. 14, 2023, all consolidated transport service entities and individual operators with filed applications for consolidation before the deadline are allowed to continue operating under their existing provisional authority (PA).

However, all PAs issued to individual operators that have not filed for consolidation are deemed “revoked” effective January 2024 and their previously authorized PUVs are now unregistered.

One December 29, LTFRB Technical Division chief Joel Bolano said more than 60 percent of PUVs have so far consolidated into cooperatives or corporations.

Special permits

Bolano assured that a transport crisis will not happen in 2024 as special permits will be issued to allow PUVs to ply routes where there are no consolidated operators.

These special permits will be issued to consolidated operators in other routes that are capable of dispatching more PUVs, as well as unconsolidated operators but only until January 31, 2024.

What is the PUVMP

The Public Utility Vehicle Modernisation Program (PUVMP) is a programme launched by the Department of Transportation of the Philippines in 2017, with the goal of making the country's public transportation system efficient and environmentally friendly by 2020.

It has been repeatedly pushed back due to fierce opposition from militant transport groups opposed to the phase-out of jeepneys, powered by hand-me-down diesel engines from Japan. Constant threats of transport strike has allowed these dinosaurs of Philippines roads to get operating licences from the regulators even if the jeepneys are more than 25 years old.

In essence, the program aims to replace “jeepneys” with vehicles that have at least a Euro 4-compliant engine to lessen pollution and replace PUVs that were not deemed roadworthy under the standards of the Land Transportation Office.

Guidelines

The government has issued guidelines, particularly the Department of Transportation's (DOTr) Omnibus Franchising Guidelines (Department Order 2017-011). It has also extended deadline, heeding the call of individual jeepney drivers to delay the phaseout. Driver and operator groups have also launched transport strikes to express their opposition to the programme.

Many of the jeepneys granted public transport franchise are as much as 20 years old, and are powered by second-hand diesel engines from Japan.

The guidelines solidify the intended phaseout of public utility vehicles deemed not roadworthy, introducing new franchising rules favouring cooperatives, corporations with fleets of 15 vehicles and up for new routes.

Role of local government, franching board

Local government units (LGUs) are tasked with crafting local transport plans detailing route networks, modes, and required PUV numbers, serving as the Land Transportation Franchising and Regulatory Board's (LTFRB) basis for establishing PUV routes.

While the aim is to enhance mass transport efficiency and reduce emissions, concerns arise over the displacement of hundreds of thousands of drivers and small operators.

The burden falls on them as the government ushers in this new era. The guidelines set specific requirements for PUVs to qualify for franchises, mandating features like Global Navigation Satellite System (GNSS), free Wi-Fi, CCTV, automatic fare collection systems, speed limiters, and dashboard cameras.

Loan programme to replace 250,000 jeepneys

The government targets to replace around 250,000 jeepneys nationwide, impacting drivers and small operators due to the unaffordability of allowed substitutes, corporate capture, and anticipated fare hikes.

To help modernise the country’s transport fleet, and retire thousands of run-down jeepneys, the government has devised a loan program through the Land Bank of the Philippines (LBP). Loans of up to Php1.6 million for new PUVs are offered to drivers and small operators.

Old business model

The business model for transport in the Philippines is led by “operators” (owners) and drivers who work on a “boundary” basis, who some drivers are also operators. Most jeepneys are individually owned, but are organised under various military groups.Some drivers are also operators.

With government push, the country has seen the rise of transport cooperatives, now operating fleets of brand-new mini-buses. A number of operators drivers, however, claim it’s a challenge to afford electric or Euro IV-compliant jeepneys.

Subsidy

The soften the impact of the phaseout, the government also offers a subsidy, amounting to Php2.2 billion, which aims to help around 28,000 drivers/operators over three years.

Critics argue that the government's approach neglects the livelihoods of drivers and small operators, placing the burden on them.

While the modernisation plan is not perfect, and won’t satisfy everyone, the options for single operators/drivers in franchising have been scrapped, emphasising the importance of recognising public transportation as a service that should be reliable, safe, and affordable for commuters.