Debts push transport cooperatives to collapse

By Rjay Zuriaga Castor

Transport cooperatives in Iloilo City are sinking deeper into debt, with half already struggling with overdue bank loans under the Public Utility Vehicle Modernization Program (PUVMP).

Councilor Sedfrey Cabaluna, chairman of the Committee on Transportation, said seven of the 14 cooperatives operating in the city are under remedial measures such as restructuring.

Cabaluna said operators blame the financial strain on rising fuel prices, worsening traffic congestion, and stiff competition from traditional jeepneys, including those serving boundary towns, that still run alongside modernized units.

Management challenges have added to the problem, with some cooperatives facing leadership gaps, labor law issues, and poor financial management.

“If these issues are not addressed, there is a possibility that these cooperatives will be bankrupt and dissolved, resulting in job losses,” he said.

Cabaluna said operators are maximizing daily income to avoid repossession, leading to overcrowding in modern jeepneys.

“We should no longer be surprised why these operators are overloading their passengers like sardines in a can and racing on the road. It’s because they have monthly amortizations to pay to prevent their vehicles from being repossessed,” he said.

He noted that this reality is far from the “modern, efficient, and environmentally friendly” transport system envisioned when the Department of Transportation (DOTr) launched the PUVMP in 2017.

Iloilo City was among the first to adopt modernization, with cooperatives formed, a Local Public Transport Route Plan approved, and modernized jeepneys acquired through government bank loans starting in 2019.

Loans under the Program Assistance to Support Alternative Driving Approaches carried a 6 percent interest rate with a seven-year repayment term.

The government provided a 5 percent equity subsidy per vehicle, estimated at PHP 160,000 depending on the model.

Cooperatives also benefited from payment suspensions and service contracting schemes during the COVID-19 pandemic that helped cover salaries and operations.

With those relief measures phased out, many cooperatives are now struggling to sustain operations.

Cabaluna said banks were “forced” to extend loans to cooperatives but cannot immediately embargo modernized jeepneys since they must also consider the commuting public’s needs.

The councilor called on the DOTr to take responsibility for the plight of Iloilo transport cooperatives.

“We call on the DOTr, which pushed for this program, to also take responsibility for those who followed their mandate. The cooperatives must be guided on how to properly manage their business and provided with additional subsidies so they can recover and not collapse,” he said.

He questioned why a law to strengthen the modernization program has yet to be passed years after the policy’s rollout.

“Until now, it seems that everything has been left to the LGU to resolve—a problem that was initiated and then abandoned by the national government. Where is the law that was supposed to strengthen this modernization program? Why has it not been passed until today?” he said.

Cabaluna also criticized the program’s implementation, saying cooperatives, drivers, and operators were forced into an unprepared system.

“Why disrupt the old system before laying down a solid alternative, and why force everyone into forming cooperatives prematurely?” he said.

He stressed that what is “truly past due” is not loan payments but the “clear direction and immediate action” that should have come from the national government.

On Wednesday, the City Council passed a resolution urging Congress and the DOTr to provide additional subsidies and guidance to transport cooperatives in Iloilo City.