“Since the announcement of pilot areas in 2017, we have not monitored a single official report or briefing by the country’s transport agencies on whether the pilot areas were viable, profitable routes for jeepney operators and drivers that would enable them to regularly pay the high financial costs of implementing the modernization program,” said Terry Ridon, Infrawatch PH convenor and former House transport committee member.
Ridon, who raised concerns on the PUV modernization program as the Duterte government’s urban poor chief, said a positive result of the modernization program in pilot areas is critical to convince operators-drivers that acquiring modern jeepneys will not drive them to bankruptcy.
Mutually acceptable financial proposal
“Ultimately, government will have to provide a mutually acceptable financial proposal to operators-drivers if it really wants the modernization program to succeed.”
Ridon said a major component in an acceptable financial proposal is a larger government stake in acquiring new vehicles.
“Government’s five-percent equity commitment or subsidy to acquire new vehicles is clearly insufficient, particularly because this is an involuntary loan, which no one except government wanted. Worse, the subsidy is still capped at eighty-thousand pesos, while the prices of the modern jeepneys wildly vary to more than P2-Million.”
Raise government subsidy
Ridon said government should consider raising its equity commitment from ten to twenty percent.
“With next year's P 4-Trillion government budget, a larger equity commitment to ensure the nationwide success of the modernization program is just a drop in the bucket.”
Cut loan interest rates
Ridon also said that the interest rates for the loans should now be adjusted, given that the Bangko Sentral ng Pilipinas had undertaken several interest rate cuts in as recent as last week.
“Clearly, government’s financial proposal fro 2017 should now be updated to reflect current market conditions.”