Jeepney drivers to get P2.26-B government subsidy

MANILA, Philippines - The government has approved a P2.26-billion subsidy until next year for jeepney operators and drivers to cover equity for at least 28,000 new units under its public utility vehicle (PUV) modernization program.

Land Transportation Franchising and Regulatory Board (LTFRB) spokesperson Aileen Lizada yesterday said various government agencies have agreed to grant a subsidy of P80,000 per unit for 28,346 jeepneys nationwide until 2018.

The subsidy covers the five-percent equity for a loan package of P1.2 million to P1.6 million from the state-run Land Bank of the Philippines (LBP) for the acquisition of new vehicles for qualified operators or drivers.

The loan will cover all replacement jeepney types, whether electronic, solar or Euro-4-compliant units, Lizada said.

She said the departments of finance, transportation, and budget and management are in talks for the subsidy package for 2019.

The three pilot areas for the package loan were identified by the LTFRB official as the Senate Employees Transport Service Cooperative Inc., the Taguig Transport Service Coop and the Pateros Fort Bonifacio Transport Service Multipurpose Coop which, she said, were able to meet the requirements set by the bank for the loan.

Last May, the LBP established a P1-billion credit facility that would bankroll the jeepney modernization program, which will initially cover the replacement of around 650 units.

Under the PUV modernization program, the government is looking into modernizing the majority of the 180,000 running jeepney units in the country.

The program has come under fire from some transport groups as they argued that it is anti-poor and the government should instead opt for a rehabilitative thrust instead of offering loans.

Even with the subsidized equity, jeepney drivers or operators will have to pay P800 per day over a seven-year period for the loan, which has an interest rate of six percent per annum.