NEDA mum on fare hike, recommends increasing fuel subsidy for PUVs
MANILA, Philippines — Despite the calls of groups representing jeepney drivers, the national government is looking at alternatives to raising fares on public transportation amid the disproportionate rise in the price of diesel, including increasing the fuel subsidy program for public utility vehicles.
Jeepney groups are calling for a P1 increase to the current minimum fare of P9 as diesel prices skyrocket. The Land Transportation Franchising and Regulatory Board is set to hear petitions later Tuesday.
Speaking at President Rodrigo Duterte's "Talk to the People" Monday night, National Economic and Development Authority chief Karl Kendrick Chua said that the Cabinet's Economic Development Cluster issued its recommendations involving gas and diesel including:
- Increasing fuel subsidy program from 2.5 billion to 5 billion
- Continuing promotional discount of oil companies including 1 to 4 pesos per liter for PUVs
- Increasing buffer stock from 30 days to 45 days
- Providing additional fuel vouchers for agricultural producers by increasing budget from 500 million to 1.1 billion
- Suspending or removing pass-through fees in local government units, industrial parks, and subdivisions
He did not mention calls for wage hikes from transport workers. "The first tranche will be given in March and the second tranche in April," he said. "This will help alleviate additional [costs] for the jeepneys and other PUVs."
Jeepney groups have expressed apprehension over the fuel subsidy program, saying the national government has been releasing the money to operators instead of directly giving it to the PUV drivers. The LTFRB has defended this saying it is in the law that the franchise holder is the beneficiary of the subsidy.
The cluster also recommended the full implementation of service contracting and its expansion for all public transport routes. Under service contracting, drivers and operators of public utility vehicles are paid by the government to ply their routes on a per kilometer basis. It also proposed the government "promote e-vehicles, expand charging stations, [and] aggressively promote active transport."
Increasing buffer stocks would require a law to be enacted.
"Given the time that we have...I just hope that they would read your study carefully," Duterte said in response to Chua's presentation. "We'll have to lobby Congress."
"If the situation escalates, we could recommend a special session," Chua offered.
At Monday's hearing of the House ad-hoc committee on the fuel crisis caused by Russia's invasion of Ukraine, Rep. Edgar Sarmiento (Samar) who chairs the House transportation committee said that the cost of $115.74 per barrel of crude oil as of August 2022 marked the second-highest price since 2008.
Sarmiento added that in the country's road sector, 67.6% — which comprise public utility vehicles such as jeepneys and buses — rely on diesel fuel. From P40.70 in March 6 last year, the average price of diesel products now stands at P58.65 as of Sunday, good for a +44.1% increase.
During that same hearing, Undersecretary Rose Edillon of the NEDA said raising transport fares could lead to a bigger inflationary risk if it eventually leads to wage hike petitions later on.
In a statement, Rep. Joey Salceda (Albay, 2nd district), House Ways and Means chair proposed a subsidy program funded by excess VAT revenues due to rising oil prices.
Salceda proposed the P68.8 billion subsidy program to be composed of the following:
- Monthly lifeline rate and middle class power subsidies worth P29.3 billion
- Fertilizer subsidies for farmers with farms under 3 hectares, for P20.0 billion
- Relief programs for Typhoon Odette victims, for P8.0 billion, to complete President Duterte’s P1 billion pledge
- Social pension increases worth P3.3 billion
- Fuel subsidies for small fisherfolk, worth P3.2 billion
- Authorizing the Pantawid Pasada program for drivers, under the 2022 budget’s unprogrammed funds, for P5 billion, including subsidies for tricycle operators and drivers, which Salceda insisted on during the hearing
“We may realize some P75.2 billion in incremental VAT subsidies if prices continue to rise. We could use that to fund the Katas ng TRAIN programs," he said.
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