400% fare hike amid PUV modernization? DOTr vows assistance to operators

The Department of Transportation (DOTr) on Tuesday said it will provide assistance to operators to address the reported possible 400% increase in jeepney fares due to the PUV modernization program.

This after non-profit organization IBON Foundation said the administration is "indifferent" to the plight of the transport sector.

“The worsening privatization and corporatization threatens to raise jeepney fares by 300% to 400% over the next few years,” IBON said.

DOTr Undersecretary Timothy John Batan said the concern of IBON might be about the Step 2 of the PUV modernization program, where traditional jeepneys should be replaced with modern jeepneys.

He said the government has made changes in the program to ease the financial burden of jeepney operators in replacing their units with modernized ones.

“First, we have increased the subsidy. At the start we were only giving P80,000 per unit, that was increased to P160,000 per unit. Now, it is between P200,000 to P300,000 depending on the type of jeepney that you are modernizing into,” Batan said in an ANC interview.

The cost of a modernized jeepney is around P2.3 million to P2.8 million per unit.

“Number 2, we've continued working with our government banks, Landbank, [Development Bank of the Philippines], to simplify the procedures for availing of cheap financing,” Batan added.

When asked about the 6% interest rate being too high for jeepney operators, the DOTr official said the government is tapping more private lenders to create a competition among them for cheaper interest rates.

“The interest rates are subject to banking regulations because the banks also have to protect the interest of their depositors,” he said.

“What we are doing now is expanding the pool of lenders to the sector by inviting private banks to also participate,” he added.

The deadline for the consolidation of jeepney operators under the PUV modernization is on December 31, 2023, which will not be extended as announced by President Ferdinand Marcos Jr.

According to the DOTr, around 70% of jeepney operators have already complied with the consolidation process.—Joviland Rita/AOL, GMA Integrated News