MANILA, Philippines – (UPDATE 3) The Land Transportation and Franchising Regulatory Board (LTFRB) launched Monday fuel efficient public utility vehicles that sought to save on fuel while increasing drivers' income.

During the 21st anniversary of the LTFRB, President Gloria Macapagal-Arroyo announced the release of the P1 billion fund from the “Katas ng VAT” for PUV drivers to enable them to convert their diesel engines to liquefied petroleum gas (LPG) or compressed natural gas engines.

“Kasi kung hindi kayo magko-convert talagang napakataas na ng presyo ng langis [Because if you do not convert, the price of fuel if really very high],” she said.

At the same time, she acknowledged the high cost of converting engines.

“Ngayon abot sa P200,000 ang kailangan kung magpapalit ng makina. Aabot ng P70,000 kung bibili ng conversion kit at aabot sa P550,000 kung bibili ng bagong jeepney na gumagamit na ng alternative fuels. Kaya tutulungan kayo ng pamahalaan [Now, the cost of changing engines can reach P200,000. A conversion kit can cost P70,000 and a new jeepney that uses alternative fuel can cost P550,000. So the administration will help you],” she said.

Those who would like to avail this benefit will just have to go to any Development Bank of the Philippines and Postal Bank to apply.

Arroyo added that drivers could pay without interest P80 a day for two years.

“Saan kayo makakahanap ng ganung pautang na ang bayad ay P80 per day lamang kung hihiram kayo ng P200,000? At hindi lang yun, walang interes so siguro mababayaran ninyo ng paunti-unti sa loob ng dalawang taon [Where will you find credit that requires you to pay only P80 per day on a loan of P200,000? And not only that, it is interest-free so you will be able to pay it slowly over two years],” she pointed out.

She also thanked transport groups for junking their petition for a fare increase.

LTFRB chairman Thompson Lantion said the initial project would allow drivers to convert their engines to run on 70% diesel and 30% LPG.

Arroyo said the target would be to convert the engines initially of 10,000 PUVs.

Lantion said that as of now, 20 jeepneys and 10,000 taxis were running on a mix of diesel and natural gas.

Transport group Pasang Masda president Obet Martin said they were “very happy” with the government subsidy.

“Kami sa hanay namin malaki na ang matitipid ng driver, lalo na walang interes [On the part of the drivers, we could save much, especially since we will be paying without interest],” he said.

Martin added that the average income of drivers ranged from P250 to P300 a day and the subsidy would further increase their income.

The Federation of Jeepney Operators and Drivers Association of the Philippines (FEJODAP), also said it is now looking to switch from diesel to LPG use to trim fuel costs, after a petition to increase fares filed with the LTFRB was withdrawn.

The party-list "1UTAK has withdrawn all fare hike petitions, and we are part of that group. Anyway, those petitions have been pending for months and the proposed fare hikes have been overtaken by the weekly fuel price increases. So now we are looking at alternatives, including machine conversion," FEJODAP president Zeny Maranan said in an interview on Monday afternoon.

The scrapped fire hike petition, if it had been approved, would have brought the minimum fare from P7.50 to P9 plus the P1.25 up to P1.75 increase for succeeding kilometers.

1UTAK includes FEJODAP, National Transport Union (NTU), Alliance of Concerned Transport Organizations (ACTO), and Associations of Land Transport Operators and Drivers Association of the Philippines (ALTODAP) among others.

Also During the anniversary, hundreds of PUVs that ran on biofuel, CNG, and LPG were on display. Senator Juan Miguel Zubiri said that with the immediate passing of the Biofuels Act, PUV operators and drivers could save money because a liter of ethanol, a kind of biofuel, would cost only P35.

Zubiri added that ethanol would be exempted from VAT charges.

Lantion said a liter of CNG would only cost P20 to P25 per liter.

Lantion added that both biofuels and CNG were made locally, making it cheaper compared to fuel. With this, he said the fuel-efficient PUVs would “improve the quality of life” of the transport sector and PUV drivers because it would increase their take home pay.

“With the escalating prices of fuel, we need a mechanism for fuel conservation. The fuel-efficient PUVs aim to increase the income of drivers,” he said.

Lantion added that the fuel-efficient PUVs would be cheap and environment-friendly, benefiting both drivers and commuters.

“Itong mga makabagong sasakyan ay para sa malinis, maingat, at maayos na paglalakbay [These new vehicles are for clean, safe, and efficient travel],” he added.