World Bank: Modernize the commute, not just the jeepney

ILOILO CITY — The World Bank Group has called for a major overhaul of the Public Transport Modernization Program (PTMP), urging the government to shift its focus from replacing old public utility vehicles to improving service quality while protecting the livelihoods of drivers and operators.

Bowen Wang, senior transport specialist of the World Bank Group, said the program needs “a refined objective” that prioritizes commuters’ experience instead of focusing only on a shift to eco-friendly alternatives and the organization of operators into cooperatives.

“We are refining the objective of the PTMP not to be about modernizing the fleet but to focus on modernizing the service in terms of commuter experience for everybody — reliability, punctuality, and how we offer our services during off-peak hours,” Wang said during a press briefing on Tuesday.

Wang said the current system exposes drivers and operators to intense competition and financial risks because they shoulder operating costs while relying on passenger fares for income.

This setup, he said, encourages operators to prioritize routes and hours with higher passenger demand, potentially reducing service during off-peak periods.

To address this, the World Bank is proposing a gross-cost service contracting model, under which the government pays transport operators a predetermined amount for providing services according to specified standards.

Under this model, the contracting authority would retain fare revenues.

Payments could be based on vehicle-kilometers traveled or hours of service, with operators required to meet service standards monitored by the government.

“By doing that, alleviating them (operators and drivers) from the ridership risk and the sense of competition. As long as you provide the service to the commuters as per the required service levels, which will be monitored by the city government, they would have guaranteed income and revenue,” Wang said.

Wang argued that many of the challenges operators have faced since the program took effect stemmed from competition and exposure to ridership risk.

The PTMP, which the Department of Transportation launched in 2017 as the Public Utility Vehicle Modernization Program, seeks to replace aging jeepneys and other public utility vehicles with newer, cleaner models and to consolidate individual operators into cooperatives or corporations.

Cooperatives under the PTMP acquired modern vehicles mainly through government-backed loans, supplemented by equity subsidies that reduced their initial financing burden.

However, the cooperatives remain responsible for loan repayments and operating expenses, prompting calls for additional government assistance as some groups struggle with debt and low revenues.

“The moment you take that financial insecurity and competition away from the picture, the drivers and operators could focus on delivering service rather than fight over a living,” Wang said.

Under the proposed model, operators that have already purchased modernized vehicles would also be covered by the gross-cost service contracting scheme, allowing them to receive predictable payments that could help them meet their financial obligations.

“Under the new proposal, we are protecting drivers and operators from the ridership risk and all those operating cost risks,” he added.

A ‘learning curve’

Iloilo City was among the first cities to implement the PTMP and began acquiring modernized jeepneys and forming transport cooperatives as early as 2018-2019.

It was also the first local government unit to fully implement its enhanced Local Public Transport Route Plan, a key PTMP requirement.

The enhanced plan, launched in May 2024, covered 17 rationalized routes and eight new developmental routes.

Asked whether Iloilo City’s early implementation placed it at a disadvantage, Wang said the experience had given the city valuable lessons on the challenges of implementing the program.

“You are the first one going through this learning curve. You are the first one who felt some of the challenges along their implementation,” he said.

“We should all admit that it is not an easy journey and it is a learning process for the central and the city level. The value that we hopefully will bring to the table is to accelerate that learning curve,” he added.

He said Iloilo City’s experience, including the challenges it had encountered over the years, could serve as a valuable resource for improving the program and replicating successful reforms in other parts of the country.

Wang maintained that the modernization program’s underlying objectives remained valid, even as its implementation needed adjustments.

He also welcomed the Department of Transportation’s area-focused approach, which he said could draw on implementation experiences and lessons from cities such as Iloilo to improve the program’s design and application elsewhere in the country.

The department and the World Bank Group are working together on an area-focused approach to the PTMP, which seeks to improve urban mobility, commuter experience, and last-mile connectivity.

As part of this approach, Iloilo City is developing a citywide pilot program intended to serve as a benchmark for the next phase of transport modernization.

The pilot program seeks to address implementation challenges through reforms in governance, business models, and contracting arrangements, as well as digital transformation.

On Tuesday, the city government and the World Bank Group held a Public Transportation Modernization Convention to present proposed reforms, discuss their implications for Iloilo, and gather feedback from stakeholders and residents through public consultations.

Transport groups protest

Meanwhile, BAYAN Panay said it joined about 100 members of transport groups under the No to PUV Phaseout Coalition (NTPPC) in a protest alongside the convention at Diversion 21 Hotel.

Consumers and commuters under the Panay Consumers Alliance (PCA) and other sectoral groups under BAYAN Panay also took part, according to a press statement from BAYAN Panay.

The groups said they oppose what they called the World Bank-funded redesigned PTMP, which they claimed threatens the livelihoods of drivers and small operators and undermines the public’s right to affordable and accessible transportation.

The NTPPC submitted a position paper to the convention.

The coalition claimed the redesigned program seeks to phase out all remaining traditional jeepneys and would require transport cooperatives to lease electric vehicles from private companies.

The groups said Iloilo City’s jeepney fleet fell from 2,535 to 1,782 units after the modernization program took effect, a reduction of 753 units, or 29.7%.

The remaining fleet consists of 1,227 traditional jeepneys and 555 minibuses, according to the groups.

Under a proposed 1-to-3 replacement ratio, the 1,227 traditional jeepneys would be replaced with 409 electric vehicles, the groups said.

They estimated that the earlier phaseout and the proposed replacement would affect 1,980 jeepney units and 5,940 families, or about 29,700 people.

Based on estimates in the position paper, daily passenger-carrying capacity could drop from 710,000 to 404,880, a loss of 305,120 passenger places, or about 43%.

The groups said this could lead to longer wait times and overcrowding.

They also cited the cost of route segmentation under the PTMP, pointing to a 2024 position paper that BAYAN Panay and the PCA submitted to the Iloilo City Council.

That paper reported additional round-trip costs of PHP 40 for Oton, PHP 12 to PHP 30 for selected Leganes routes, PHP 16 to PHP 18 for selected Pavia routes, and PHP 12 for San Miguel.

BAYAN Panay described the program as an “imperial policy” that it said attacks Filipino drivers and small operators in order to corporatize the transport sector.

The group also said the administration of President Ferdinand Marcos Jr. seeks to deepen the public’s dependence on private automobile corporations and foreign loans.

The groups demanded genuine public consultations and rejected the selection of Iloilo City as a pilot area for the redesigned program.

They also called for support for local public transport manufacturing and for accessible, affordable, safe, and reliable public transportation.