Every oil spike forces the same response. Government releases fuel subsidies, rolls out
ayuda, and tries to hold the line on fares. We have done this repeatedly—during past
global price surges, and again today. In 2022, the Department of Budget and
Management released about ₱2.5 billion for the Department of Transportation’s fuel
subsidy program, drawn from regular appropriations under the General Appropriations
Act. As the agency stated, the release was intended “to mitigate the impact of rising fuel
prices on public utility vehicle drivers” (Department of Budget and Management, DBM
press release, 2022). It helped, but only in the way emergency measures help: it bought
time.
What it did not do was change the system that keeps bringing us back to the same
problem.
Our transport sector runs on fuel we do not control. That is the core vulnerability. When
prices rise globally, the pressure lands locally—on drivers first, then commuters, and
eventually on the national budget. The state steps in not out of preference, but
necessity. Without intervention, the system stalls.
What is often missed is how this response has become embedded in the system itself.
Fuel subsidies are no longer treated as temporary relief but as recurring fiscal
adjustments tied to external shocks. Each price surge triggers the same cycle—release,
extension, replenishment. Over time, this creates an expectation that the system will
always be supported this way, even if the underlying structure remains unchanged.
We are not funding reform. We are funding continuity.
Meanwhile, the Public Utility Vehicle Modernization Program has been on the table for
years, with targets to replace aging fleets and reorganize operations. The intention is
sound. But implementation has struggled because the hardest part was never the
vehicle. It was always the structure behind it.
An electric jeepney costs anywhere from ₱2.5 to ₱3 million. A traditional unit costs a
fraction of that. Expecting small operators—many of whom operate on daily cash
flow—to absorb that difference is unrealistic. This is why resistance persists. It is not
ideological. It is financial.
So the government ends up in a bind. It subsidizes fuel to keep the old system alive,
while at the same time asking that same system to modernize using capital it does not
have.
That contradiction is the policy.
If electric transport is going to work, it cannot be treated as a compliance exercise. It
has to be approached as a system redesign anchored on financing and scale.
Start with where the pressure is most visible. Corridors like EDSA or Commonwealth
carry massive passenger volumes every day, particularly during peak hours when
queues extend well beyond designated stops. These routes also consume the most fuel
and absorb the most subsidy pressure when prices rise. If there is any place where
electrification immediately makes sense, it is there.
Deploying organized electric fleets along these routes does two things. First, it reduces
dependence on diesel where consumption is highest. Second, it improves service
reliability for the largest number of commuters. Congestion eases, dispatch becomes
more stable, and more people are moved using fewer units operating on predictable
schedules.
But this only works if the operating model changes alongside the technology.
The boundary system has long defined how drivers earn. It pushes them to maximize
daily take, often at the expense of service quality and safety. If you introduce electric
vehicles into that same structure, you simply increase the cost of operation without
correcting the underlying behavior.
This is why consolidation matters. Fleet-based operations—whether through
cooperatives or corporate entities—allow financing to enter the picture. Banks will not
lend to individuals with volatile income streams. They will lend to organized entities with
structured routes and predictable revenues.
From there, the financing model becomes possible. Instead of requiring operators to
purchase units outright, vehicles can be deployed through lease arrangements backed
by government guarantees. Payments are spread over time, aligned with actual
operations. The upfront burden disappears.
Now place that beside the subsidy question.
Every peso spent on fuel assistance today keeps diesel in the system. It is necessary,
but it does not accumulate into anything. Once spent, it is gone. When prices rise again,
the same requirement returns. This pattern is reflected in DBM releases. In 2023, the
agency reported that “the National Government allocated around P3.0 billion to continue
fuel subsidies for public utility vehicle drivers” (Department of Budget and Management,
DBM press release, 2023), an increase from the previous year driven not by reform, but
by continued exposure to global oil prices.
But if even a portion of that spending is redirected—carefully, gradually—into financing
electric fleets, the outcome changes. You are no longer just keeping the system running.
You are building a version of it that will require less intervention in the future.
This is not about removing ayuda. That would be disruptive and irresponsible. There will
always be moments when immediate relief is needed. But it cannot remain the center of
policy.
Transport should not be managed as a recurring emergency.
The oil situation today is a reminder of a weakness we have learned to live with. A
system dependent on something external will always carry risk. We can continue to
manage that risk year after year, allocating funds as needed, adjusting as conditions
change.
Or we can begin to reduce it.
Electric transport will not eliminate exposure overnight. It requires capital, coordination,
and discipline in execution. But it shifts the foundation. It moves public transport away
from dependence and toward something stable, predictable, and sustainable.
The longer we stay in the current model, the more we will keep paying just to stand still.
Disclaimer: The views and opinions expressed in this article are those of the author and
are intended to encourage public discussion on governance and national issues. They
do not represent any official position of the institutions the author may be affiliated with.
About the Author:
Paul Y. Chua, PhD, holds doctoral degrees in Fiscal Management and Peace and
Security, and a master‘s degree in National Security Administration. He has completed
executive programs in several countries, specializing in transport, migration, urban
planning, and public policy, with emphasis on governance, innovation, and integrity.
Originally published by The Daily Chronicle.