BUSINESS

DOTr seeks P5-B subsidy to cushion fuel price blow

The agency said it urgently needs the funds for its service contracting program which would allow the government to pay participating transport operators and drivers directly, reducing pressure to pass higher operating costs on to passengers. ‘When we have service contracting, the government pays our transport groups, not the commuters. At the same time, we can be assured of transportation.’

Maria Bernadette Romero · Sep 20, 2026, 3:11 AM

THE DoTr is urging Service Contracting Program re-funding as a response to skyrocketing of fuel prices in the country as a result of the crisis in the Middle East and to prevent transport operators from going bankrupt and block massive commuter fare hikes. Previously launched in April 2026, the SCP’s land-based phase was temporarily deactivated because its initial P740 million budget was exhausted. The DoTr is actively restoring it and has announced that it is utilizing a P1 billion allocation under the 2026 General Appropriations Act to fund another round of the program, and is proposing as much as P5 billion to implement the program nationwide. — Philippine News Agency

The Department of Transportation (DoTr) is seeking P5 billion for its Service Contracting Program (SCP) in 2027 to keep public utility vehicles on the road and shield commuters from the impact of rising fuel prices.

Transportation Secretary Giovanni Lopez said Saturday the program would allow the government to pay participating transport operators and drivers directly, reducing pressure to pass higher operating costs on to passengers.

Transportation assured

“When we have service contracting, the government pays our transport groups, not the commuters. At the same time, we can be assured of transportation,” Lopez told members of the Senate Finance Subcommittee meeting hearing on the agency’s proposed 2027 budget

“We encourage drivers and operators to continue operating because the government will pay you, and we will not take it from our commuters,” he added.

The funding request follows a national directive to provide assistance to the transport sector, including commuters.

The DoTr said it faced a similar funding shortfall last year before Congress provided P1 billion for the program. Of that amount, P800 million was allocated to land transportation and used in May and June.

Funding largely concentrated in Metro Manila

Lopez said this year’s funding was largely concentrated in Metro Manila despite transport groups and commuters nationwide facing similar pressure from higher crude oil prices.

“The problem we experience here when it comes to crude oil prices is also being experienced in different provinces across the Philippines,” Lopez said.

Desire to apply SCP nationwide

“Our commuters face the same problem. So, the computation of why it’s P5 billion is because we wanted to apply the service contracting program nationwide and to cover as many transport groups and commuters as possible,” he added.

The DoTr is asking the Senate to restore funding for the program as lawmakers deliberate on the agency’s proposed budget for next year.