A National Mandate, A Local Burden

The road to modernization is paved with debt, and in Iloilo City, it’s leading transport cooperatives off a financial cliff. Half of the city’s 14 cooperatives are now struggling with overdue bank loans, a crisis born from a national mandate that has become an crushing local burden.

The dream of a modern, efficient, and clean transport system, promised by the Public Utility Vehicle Modernization Program (PUVMP), is turning into a nightmare of repossession threats and reckless driving.

The core of the problem is the program’s flawed math. Cooperatives were pushed to take on immense debt, with modernized jeepneys costing anywhere from P1.4 million to a staggering P2.8 million per unit. The government’s subsidy, initially P160,000, covers a mere fraction of this cost. Simple arithmetic shows the model is unsustainable. A cooperative would need to earn thousands of pesos per unit, per day, just to cover loan amortization—a near-impossible feat amid soaring fuel prices, worsening traffic that limits daily trips, and competition from traditional jeepneys.

Pandemic-era subsidies were a temporary anesthetic, masking the program’s terminal illness. With that support gone, the deep-seated financial vulnerabilities are now painfully exposed. This is not just a case of mismanagement by cooperatives; it is a systemic failure engineered from the top down.

Councilor Sedfrey Cabaluna was right to call this “a problem that was initiated and then abandoned by the national government.” The Department of Transportation (DOTr) launched this disruptive, high-cost program in 2017. Years later, there is still no foundational law to strengthen it, leaving local governments and operators to grapple with the consequences. The DOTr insists on pursuing the program, acknowledging “isolated issues,” but for Iloilo’s cooperatives, these issues are existential threats.

The human cost of this abandoned mandate is visible on our streets. As operators maximize income to avoid repossession, commuters are packed “like sardines in a can,” and drivers are forced to race on the road, compromising the very safety the program was meant to ensure. A policy designed for progress has, perversely, made the daily commute more hazardous.

The situation in Iloilo City serves as a crucial data point for the PUVMP’s future. The path forward is an immediate, collaborative action. To prevent the imminent collapse of local cooperatives, the DOTr and government financial institutions must broker an emergency restructuring of loans, providing immediate relief.

Beyond this stopgap, a permanent solution requires a fundamental reassessment of the program’s economics. The national government can adjust the subsidy to a realistic level that accounts for high vehicle costs and create a flexible financing scheme sensitive to fluctuating fuel prices and operational realities.

Finalizing a law to support the PUVMP would provide the stable, long-term policy framework that operators need to invest with confidence.

Treating Iloilo’s crisis as a blueprint for reform will steer this vital program away from failure and toward a truly modern and sustainable public transport system for all.