Low interest loans needed to help with jeepney modernization – Villar
MANILA, Philippines – Senator Cynthia Villar intends to push for lower interest loans for jeepney drivers and operators transitioning to modern jeepneys under the government’s Public Utility Vehicle (PUV) Modernization Program.
“We have to find a way by which they can afford to buy this. I’m thinking of giving a lower interest para bumili nito (to buy these) through the Landbank and DBP,” Villar said during the launching ceremony of a new e-jeepney model on Tuesday, March 28.
Villar said she was taking cues from how the government provides low interest loans to farmers by giving funds to the Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP).
“It’s a grant from government, so there’s no cost of money. So, Land Bank and DBP will just charge their overhead. Murang mura po ang interest cost to the farmers (The interest cost to the farmers is very low). Maybe we can do the same to our jeepney drivers,” she said.
“I’m not in charge of transportation. I’m in charge of the farmers. But this is an idea which we are doing for the farmers, so maybe we can do it also for our jeepney drivers,” she told reporters.
Villar currently chairs the Senate Committee on Agriculture, Food and Agrarian Reform and the Committee on Environment, Natural Resources and Climate Change. Meanwhile, Senator Grace Poe chairs the Committee on Public Services, which oversees transportation issues.
In a previous Senate hearing chaired by Poe, senators questioned the decision of transportation executives to push for the modernization program even as agencies struggled to provide route rationalization plans and enough funds for the acquisition of modern jeepneys.
Under the current PUV Modernization guidelines, jeepney operators must consolidate into either cooperatives or corporations. Once consolidated, they will also eventually be required to upgrade their fleet – a point that has sparked protest among some transportation groups, given that modern jeepneys can cost up to P2.5 million.
High costs of modernization
Board of Investments Assistant Secretary Romulo Manlapig also highlighted that the main obstacle to the modernization program was the high financial costs.
“Developments, particularly in the Senate, seem to indicate that there is anxiety in our public about the high cost of electric vehicles. We have done a lot of simulations, and we know that even at P2,000,000, each vehicle that will be deployed will have to turnover at least P4,000 to P4,500 in order to meet its costs,” Manlapig said on Tuesday.
Both the DBP and Landbank also previously confirmed that jeepney operators and drivers would struggle to pay off loans, given the steep price of modern units.
“Based on our initial study when we were involved in the conceptualization of this project, we found that operations of transport entities are to be viable if the cost is within P1.6 million to P1.8 million per unit,” said Landbank assistant vice president Genoroso David during a House committee hearing on March 9.
He added that with units now costing from P2.3 to P2.8 million, “the viability is now questionable.”
DBP vice president Rustico Cruz also said during the House hearing that operators would have to pay a monthly amortization of P38,000 to P40,000 for seven years.
New e-jeepney models in the works
However, some transportation cooperatives were eager to upgrade their fleets to newer electric vehicles.
During the launch of the 2023 Star 8 electric jeepney model, representatives from the South Metro Transport Cooperative, Taguig Transport Service Cooperative, and others expressed intentions to order several units of the e-jeepney. The model has an air-conditioning unit, a passenger capacity of 25 seats, and a maximum speed of up to 60 kilometers per hour. It can also drive up to 200 kilometers on a single battery charge.
Jacob Maimon, president and chief executive officer of Star 8, said that the new model’s price would not be significantly higher than the company’s older electric vehicles, which cost around P2.15 million.
Joel Abarentos, vice chairman of the Taguig Transport Service Cooperative, said that electric vehicles like these would help them save on the cost of diesel, especially during this time of fuel price volatility.
“Sa isang araw, ang isang unit, gumagastos kami diyan around P1,300 hanggang P1,500 para sa five rounds,” Abarentos told Rappler. “Tinignan ko ‘yung gastos namin sa diesel, mga around P1.3 million sa isang taon. So kung bibili ka rin ng battery na ito bago, okay ka pa. Less maintenance pa ‘yan. Wala ‘yang langis.”
(In one day, one unit can spend from P1,300 to P1,500 for fuel for five rounds. I checked our costs for diesel, and we spend around P1.3 million per year. So if you buy one of these that runs on battery, it might even be better. There’s less maintenance, and there’s no more oil.)
“Nagtataka nga ako sa mga ayaw mag modernize, kasi bakit ayaw mo? Dati, meron din kaming mga traditional na jeep. Kumikita ka ng P2,000 o P3,000. Bakit ‘di ka na lang dito sa bago? Mas malaki pang kikitain mo,” he added.
(It makes me wonder why some don’t want to modernize. Before, our cooperative also had traditional jeeps. We would earn around P2,000 to P3,000. Why not switch here to the newer models? You’ll even earn more.)
Meantime, Manila Electric Company (MERALCO), the Philippines’ largest private electricity distribution firm, is also set to participate in the development of electric vehicles. In a Philippine Stock Exchange disclosure filed on Tuesday, Meralco said that it had incorporated Movem Electric, a subsidiary focused on transport service networks running on electric energy.
The subsidiary will have the ability to “own, create, develop, manufacture, produce, assemble, configure, reconfigure, use, manage, maintain, operate, repair, improve, test, build, license, sell, market, distribute, lease, import and export, transport service networks utilizing electric energy and other alternative energy sources and their component charging stations, hardware, software, batteries, vehicles, accessories, parts, gadgets, digital application,” Meralco said. – Rappler.com