Elmer Francisco says he could assemble a jeepney when he was just in his early teens.
Francisco, now a 40-year-old physicist, carries the surname of one of the two families associated with the manufacture of the iconic Philippine public utility vehicle that was remade from the World War II-era general purpose conveyance (GP, pronounced geep, or Jeep). The other surname is Sarao, a family related to the owners of Francisco Motors.
In the age of climate change awareness, those motors are feeling the pressure of globalized competition.
I’ve written about my enjoyable ride on an e-jeepney with solar-powered ceiling fans. The solar e-jeepney was introduced recently to the country by Australian company Star 8, which also sells e-tricycles, e-bikes and small e-pickups.
Francisco Motors is also venturing into electric-powered jeepneys. The lowest price that the company can offer, however, is P2 million for an e-jeep with the same capacity as Star 8’s 23-passenger model, which costs only P1.6 million. A slightly smaller Star 8 model is available for P1.4 million.
That’s a hefty price difference that could be the defining factor in operators’ decision to go along with the government’s public utility vehicle modernization program. The PUV program gives jeepney operators two years to phase out units that are at least 15 years old and to switch to an upgraded, eco-friendly version.
Like e-tricycles, the e-jeepneys are becoming increasingly ubiquitous in Metro Manila.
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Francisco faced The Chiefs this week on Cignal TV’s One News, as a candidate in the Senate race. The interview, however, inevitably dwelled on his family’s business and the PUV modernization program.
Star 8 has begun fielding its solar e-jeep along some routes in Metro Manila, and is reportedly planning to bring to the country 10,000 e-jeepneys.
Francisco Motors is fighting back by offering a credit and repayment scheme under which jeepney operators can swap their old units for the electric version, obtain P300,000 in credit to make a down payment, and then pay the rest of the P2 million in installments over eight up to 15 years. The payments will be deducted from the drivers’ earnings.
Francisco’s company, EFI, partnered with Hong Kong-based financial technology firm Madison Holdings to offer the “Boundary Hulog” financing scheme.
He said transport groups like the financing scheme and the local e-jeepneys. Still, P2 million is P400,000 more than the foreign competition, with no diminution in quality.
Francisco acknowledges the fierce battle ahead. And he knows that the long-term solution is complex.
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He says that the Philippines has the technological skills needed to produce the modern jeepney that runs on electric-powered batteries with solar-powered fixtures such as mini fans. (It’s misleading, he stresses, to call a jeepney that runs on electrically charged batteries a “solar jeepney” – even if it has solar-powered ceiling fans.)
What the country lacks are the raw materials, starting with steel. Francisco laments that while the Philippines is blessed with natural resources for steel-making, such as magnetite-rich black sand, the raw materials are exported, and the country then imports finished steel products. This can make local products more expensive than their imported counterparts.
The ideal situation is for the country to industrialize using products processed from its own minerals. If this is not yet possible, the next best option, Francisco said, is to lower tariffs on steel and components needed for an electric vehicle engine. Tax breaks can also be given to those engaged locally in steel production as well as goods that use solar technology, even if only to operate vehicle ceiling fans.
Steel manufacturers can be invited to set up shop in the export processing zones, he said. Instead of being made to feel welcome, however, Francisco said the plan to end tax breaks for locators in the export zones under the second phase of the Tax Reform for Acceleration and Inclusion or TRAIN 2 is scaring away investors.
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While Francisco Motors is known nationwide, Elmer Francisco the candidate has low name recall. In case he wins, he intends to champion – as his Federalista party implies – federalism and Charter change, but also national industrialization.
Apart from laws to enhance the country as an investment destination, a critical component of industrialization, he says, is quality education and training. So this will be high on his legislative agenda in case he wins.
Francisco is hoping that in the competition for market share in e-jeepneys, Filipinos will consider the need to nurture local industries and create jobs. The foreign competition, he stresses, does not manufacture the vehicles in the Philippines.
He will have to work doubly hard to get his message across. The competition is also reportedly gearing up for a financing battle, to entice even those with limited resources to invest in their e-jeepney.
As Elmer Francisco has been in the industry throughout his life and is projecting himself as a representative of the local transport sector, perhaps the operators will heed his appeal for patriotism in their business decisions.
“We’re not just creating jeepneys, we’re creating livelihoods,” Francisco said.