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Manila, Philippines

Amid pandemic, questions arise over timing, cost of jeepney modernization

On Metro Manila's mean streets, where traffic seethes and commuters hustle to get to work or school, bright and brassy jeepneys serve as a cheap mode of mass transport.

So when jeepney operator Freddie Hernandez, 52, heard in 2017 about the Department of Transportation (DOTr)’s public utility vehicle modernization program (PUVMP), he hesitated to jump aboard.

Under the program, all jeepney operators must replace their iconic vehicles with new, Euro-4 jeeps that look like minibuses. Supposedly, the program would rationalize the Philippines’ fragmented public transport system and reduce air pollution by pushing for lower-emission vehicles.

Hernandez’s group, the Taguig Transport Service Cooperative, and the Pateros-Fort Bonifacio Transport Service and Multipurpose Cooperative were among those chosen by the DOTr and the Land Transportation Franchising and Regulatory Board (LTFRB) as the program’s pilot operators.

It took "a while” for Hernandez to convince his colleagues to embrace the project, he said. The costs alone—from spending around P300,000 (US$6,170) to put together the jeepney’s steel chassis and diesel engine, to purchasing brand-new units ranging from P1.6 million to P2.2 million—are unimaginable to most drivers who survive on the daily boundary system.

Currently, the burden of purchasing the units is on jeepney groups.

But “we felt pressured," Hernandez said. "They said then that if we didn't accept the program, they would choose another group. We knew it's still experimental, but the government challenged us, so we eventually decided to challenge ourselves and accept the project.”

Three years later, his group's experience illustrates the need for state support and inclusive planning to make the program work.

With the DOTr set on implementing fleet consolidation, the first phase of its modernization program, by the end of 2020 even as the sector reels from the onslaught of the Covid-19 pandemic, environmental and transport experts agree on one thing: To bring about and reap the benefits of a sustainable public transport system, the government has to extend higher subsidies and state support to operators and cooperatives.



As in most other countries, the pandemic has led to a massive rethinking of the way Philippine institutions and systems have been operating.

“The biggest challenge [for the PUVMP] is affordability,” said Maria Golda Hilario, associate program director of the Institute for Climate and Sustainable Cities.  “Who is both willing and able to foot the bill for the replacement, especially now with the pandemic in the equation? The government is the most logical choice at this point.”

At present, operators shoulder much of the burden of transitioning.

When, for example, Taguig City purchased the new jeeps, the government’s equity subsidies per unit were capped at 10 percent of the cost, or P80,000. Thus, its 90-strong fleet translated to a P150-million bank debt carried by the entire cooperative, Hernandez said.

But the “long-term benefits of modernizing is more important,” he said. “We can't see the effects of modernizing now, or we may not see it in our lifetimes, but we should look at its long-term benefits. That's how we convinced our operators to modernize.”

“When ... we grow too old and weak to work—most of us are already in our 50s—our children would have inherited our old units that would be hard to maintain had we not made the switch,” he said.

Still, Taguig’s story remains an outlier in the grand scheme of modernization, the first stirrings of which were felt as early as 1992.

That's why the DOTr and the LTFRB have put extra emphasis on the jeepneys, even raising the state subsidy in June to P160,000 per unit, “because in past attempts to modernize, they were the ones left behind,” said LTFRB Chair Martin Delgra III.

A just transition

But a lawmaker and certain experts are urging the DOTr to take a more radical approach that will allow a just transition for the drivers who will have to comply with the new system.

Sen. Grace Poe has filed Senate Bill No. 867 to pave the way for a “just and humane” PUVMP. If it is passed into law, operators shall only be required to replace their engines to make these Euro-4-compliant instead of overhauling entire units. Equity subsidies will still be capped at 10 percent, but loan amortization will not exceed a four percent, diminishing annual interest for at least 15 years.

“A creeping phaseout in the middle of a pandemic is straight-out inhumane,” Poe said. “We support the modernization of public transport, but we will not allow drivers to be left out in the cold. Modernization is not inherently antipoor; [we just have to] assist the sector in transitioning to the desired new system.”

DOTr senior consultant Alberto Suansing said the department was looking into the provisions in the bill especially as most operators signaled that they couldn't afford brand-new units.

"But of course we have to look at the current condition of the jeepney's [chassis]. Can you just replace the engines and then refill them again?" he asked. "It really depends."

Transport experts are proposing that the government bail out the sector through service contracting.

Under this arrangement, said economist Marjorie Muyrong, the DOTr could contract operators to deliver services on a “fee per day” or “fee per kilometer” basis.

At present, jeepneys earn their income through fares collected from passengers. But by paying them independently of ridership, operators will be encouraged to adhere to deployment schedules and provide safer and cleaner fleets, and drivers will earn stable incomes instead of being trapped in the boundary system.

In the context of the PUVMP, the government can purchase the units and own them as assets, Muyrong said.

It can then pay the operators to operate the units and collect some of the revenue, as in other Asian cities like Seoul and Hong Kong, as well as in Latin American countries that modernized their transport systems.

Suansing said this was a "good idea, but of course there are kinks that will need to be worked out since this is a government contract, and there should be minimal hassles to each party involved."

"I think the only viable way to do that is to create an entity that could take care of the contracts, but the operators would have to be consolidated first or there would be a terrifying deluge of contracts that government would have to put out," he said. "The advantage of [relegating this to the operators themselves] is that if they're already organized as a legal entity like a corporation or a cooperative, they can manage the fleet by themselves."

Modern jeepneys
The economic slowdown due to the coronavirus pandemic may have an impact on the timing and viability of the government’s jeepney modernization program, which envisions old jeepneys being replaced by environment-friendly but pricier models, like the units in the fleet presented by the Department of Transportation in this November 2018 file photo / Credit: DOTR photo

One big whole

But replacing jeepneys with lower-emission vehicles is just a small aspect of making mobility work for people, according to Greenpeace Philippines.

Its campaigner, RJ Mallari, said the issues of traffic, cars, roads, and sidewalks should be addressed as one big whole.

“Too often we’re fixated on roads and cars and jeepneys and think that’s what a city needs to focus on,” said Mallari. “But we need to ... consider mobility beyond that. It’s not just about roads and cars; it’s about how people move from one point to another [safely] while reducing emissions and keeping environmental impact low.”

A way forward is for cities to have comprehensive mobility plans on green spaces and lanes for walking and cycling, and better mass transport options, Mallari said.

Part of that is about encouraging the energy and transport sectors to work together to invest in clean energy, environment-friendly public transport, and safe walking and cycling infrastructure, he added.

Reforming the public transport system by eliminating the boundary scheme and shifting to less-polluting options can bring social security benefits to drivers and conductors, Hilario said.

"That's really the target of government: To fix the compensation for drivers," Suansing said. "Under the boundary system you can see that some operators don't treat their drivers as employees. They have no benefits and so most drivers age in their work without substantial savings. Under the program, they will be paid salaries and given social benefits [like health care and housing loans]."

But the economic loss sustained by drivers and operators during the pandemic, coupled with economic uncertainty, is an overlying problem that has to be addressed first, she said.

To initiate needed reforms, Hilario said, public investments must be poured into the transport sector.

“Pivots are needed in innovation, and just like the jeepney, we can pivot some of the components of the modernization program and use them as opportunities for consolidating the industry,” she said.

After all, she said, there must be a way to demonstrate the best practices of public health and environmental measures in the transport sector, “while we confront together the challenges brought by Covid-19.”

This story was written with the support of an environmental journalism grant from Internews' Earth Journalism Network.

Banner image: The Taguig Transport Service Cooperative and their leader, Freddie Hernandez (right), are among the lead cooperatives tapped by the Department of Transportation to modernize their jeepneys. / Credit: Krixia Subingsubing