The government’s drive to replace rolling coffins — dilapidated and polluting public utility vehicles (PUVs), including ancient jeepneys and badly maintained buses — may have ground to a screeching halt.
This after Transportation Secretary Vince Dizon admitted on Tuesday that the program, known as the Public Utility Vehicle Modernization Program (PUVMP), has been hit by loan defaults amounting to at least P5.1 billion.
While Dizon did not refer to the PUVMP but to its former name, the Public Transport Modernization Program (PTMP), he said it was “no longer viable.”
Dizon sounded the death knell on the PUVMP following questions raised by Senator Grace Poe during his confirmation hearing before the Commission on Appointments (CA).
He cited the number of transport cooperatives that have fallen behind on their loan payments for the modern vehicles they acquired for their members under the Land Transportation Franchising and Regulatory Board’s consolidation program.
“The fact that those who recently bought vehicles can no longer pay their loans, that is a clear sign that it is not viable in its present state,” Dizon told the lawmakers.
Poe, who previously chaired the Senate Committee on Public Services, asked Dizon if the PUV modernization program in its present form was still viable.
Citing Department of Transportation (DoTr) documents, Poe said P5.1 billion of the P15.3 billion in loans availed of by transport cooperatives were declared in default by banks.
“That’s why our banking institutions no longer want to lend,” Poe said.
Dizon confirmed Poe’s revelation that the LandBank and the Development Bank of the Philippines were no longer offering loans to transport cooperatives to stop their financial bleeding.
According to Dizon, a modern jeepney costs around P2.8 million, with only 15 percent of that amount subsidized by the government. In all, a jeepney driver would have to pay P2.3 million.
“Divided by five years, he would need to pay P40,000 a month,” Dizon said.
Launched in 2017, the PUVMP implementation was postponed several times.
The program requires phasing out traditional jeepneys, buses, and other PUVs at least 15 years old in favor of more environmentally friendly and efficient new models.
Transport groups had opposed the move due to concerns over the high cost, loan accessibility, and the livelihoods of small operators.
Dizon noted that of the 171,079 PUVs across the country, only some 40 percent had consolidated into transport cooperatives.
“Roughly 60 percent have not (consolidated); only 40 percent are actually consolidated,” Dizon said when asked about compliance with the PUVMP.
The program also requires jeepney operators to consolidate their franchises under a transport cooperative, which goes against the intent of small operators who do not want to lose individual ownership of their units.
Another problem raised during the deliberation on Dizon’s appointment was the non-rationalization of PUV routes. Dizon said only 280 local governments had rationalized their routes.
“That’s true, less than 20 percent of the routes nationwide have been rationalized,” he told Poe.
The CA later recommended the confirmation of Dizon’s ad-interim appointment as DoTr secretary.