DOF identifies PUV modernization funding
The Department of Finance (DOF) said that it will tap two state-owned banks and get some funding from the national government to implement the modernization of public utility vehicles (PUVs) across the country.
Finance Undersecretary Karl Kendrick T. Chua said the government would need around P417.2 billion for the PUV modernization project, which will be mainly funded by the Land Bank of the Philippines and Development Bank of the Philippines (DBP).
Initial estimate of the DOF showed that Land Bank and DBP will lend P400 billion to PUV drivers and operators, while the remaining balance of P17.2 billion will come from the general appropriation act or the national budget.
“Now, we are helping them [drivers], we are subsidizing exactly what the previous administrations couldn’t do because we have a tax reform. So, we will help the qualified jeepney drivers by subsidizing their equity,” Chua told reporters in an interview late Friday.
Under the indicated lending program of Land Bank, 95 percent of the price of the new PUVs wi;; be financed through a loan, and the 5.0 percent equity will come from the government. It carries an interest rate of 6.0 percent per annum payable in seven-years.
The DBP, meanwhile, is looking at a financing mix of 90 percent loan and 10 percent equity with an interest rate of around 6.0 percent to 8.0 percent annually, but also payable in seven-years.
The two state-lenders will allow individual borrowers and groups to avail of the loan as long as they belong to cooperatives. The new PUVs also have automatic flight guidance system and global positioning system.
“The PUV modernization is one of the tangible benefits of the tax reform,” Chua said, noting 70 percent of commuters do not take the train, but buses and jeepneys. “In the immediate term, we need to improve the efficiency, safety and comfort of our bus, jeep, and public transport system.”
From the government side, the Department of Transportation would provide P8.82 billion, while the Land Transportation Franchising and Regulatory Board as well as Technical Education Skills Development Authority will give P4.5 billion in training and social assistance.
The Office of Transport Cooperatives, on the other hand, will shell out P3.9 billion.
Chua also shrugged off claims by some transport groups that the government’s planned PUV modernization is anti-poor.
“I think it's not true that there are many opposition. There are a few noisy ones, but the majority we consulted are actually very interested. But the most important thing, it's the safety and comfort of the millions of passengers who don’t think the jeepneys are at their best condition,” he said.
Finance Secretary Carlos G. Dominguez III earlier said that public diplomacy is needed to spell popular support for the "politically challenging" plan of the Duterte administration to modernize some 220,000 public utility jeepneys (PUJs).
Dominguez said the government must carry out this difficult task of convincing PUJ drivers and operators as well as the riding public that the “well-loved" Philippine jeepney has become an "inefficient dinosaur.”