MANILA, Philippines—Invoking the public interest, Transportation Secretary Leandro Mendoza Monday put off the implementation of fare increases for jeepneys and buses—a surprise government turnaround that provoked threats of a strike from militant drivers.

The provisional fare increases for jeepneys and buses would have taken effect Wednesday, May 21.

But a day after the Land Transportation and Franchising Regulatory Board (LTFRB) announced the higher fares, Mendoza ordered the agency to defer the increases “pending review of other government support mechanisms.”

In a statement, Mendoza said that while he understood the plight of transport operators and drivers, “we have also to consider the impact of a fare increase on the commuters and the public in general.”

Government support mechanisms for the road transport sector include the P2 fuel subsidy, access to government-subsidized rice priced at P18.25 a kilo, tax exemption on spare parts, and anti-kotong and anti-colorum measures.

Neither the Department of Transportation and Communications (DoTC) nor the LTFRB responded to requests for further comments, except to say that the provisional fare hikes were not scrapped but “only deferred.”

Vigor Mendoza, president of party-list 1Utak that counts major jeepney and bus groups among its members, said transport leaders were surprised by the deferment and that a transport strike had been proposed for June.

He said the confusion arose because it was the transport sectors’ understanding that the economic impact on both drivers and consumers had been considered before the fare increases were announced the other day.

First time

He also said the government had never before taken back a provisional fare hike that had already been announced.

“This is the first time that government has announced a provisional fare increase, only to take it away later,” Mendoza said.

“We (transport leaders) have been explaining the rationale for a fare hike for a long time. We thought it was understood, hence the nominal increase. Now the drivers are confused without an official explanation from government on why the nominal increase was deferred, and when an increase could be expected.”

The 1Utak leader said that “right now emotions are high” and that transport leaders would try to reach a consensus after everyone had calmed down.

Strike in June

“There were proposals for a strike in June, for example, but first we are calling for a transport leaders’ conference,” he said.

“About 500 transport leaders are now being called. We are still looking at the dates possible but we would like this to take place by the first week of June at the latest,” he added.

“This would give us time to calm down, think more clearly, and this will also give government time to give a clearer explanation or to give a definite decision.”

He said the transport sector was waiting for the outcome of a Cabinet meeting set for Tuesday, particularly any decision on fare increases.

“We just hope we can be informed soonest of any development arising from the Cabinet meeting,” he said.

Grumbling public

Had the provisional fare increases not been deferred, the minimum jeepney fare in Metro Manila, Central Luzon and Southern Tagalog would have increased to P8 from P7.50 starting Wednesday.

The minimum fare for ordinary buses would have gone up to P9 from P8 while the fare for air-conditioned buses would have increased to P11.50 from P10.

For provincial routes, ordinary buses would have added P0.10 per kilometer and air-conditioned buses would have charged P0.25 more per kilometer.

The DoTC decision to defer an increase in public transport fares came amidst mounting public grumbling about the skyrocketing costs of basic commodities and services.

Inflation spiked to a three-year high of 8.3 percent last month due mainly to surging prices of rice and petroleum products, which are at all-time highs.

According to the National Statistics Office, an 11.4-percent increase in the prices of the heavily weighted food, beverages and tobacco items raised the year-on-year inflation rate in the Philippines to 8.3 percent in April from 6.4 percent in March.

That was the highest inflation rate since May 2005, when the inflation rate rose to 8.5 percent.

Millions into poverty

In a study released over the weekend, the Asian Development Bank warned that soaring food prices were forcing millions of Filipinos into poverty.

“Increases in food prices have enormous impacts on poverty” in the Philippines, where poor people spend nearly 60 percent of their income on food, the ADB said.

A 10-percent rise in food and nonfood prices “will lead to an additional 2.3 million and 1.7 million poor people, respectively,” it added.

The Philippines is one of the world’s biggest rice importers. Between January 2007 and March 2008, rice prices have risen at an annual pace of 22.9 percent, the study also said.

Even telecommunications companies said recently that the country’s inflation rate at 8.3 percent, coupled with the strengthening peso, had put pressure on their business.

Wide-scale protest

On the other hand, fuel prices have increased 10 times since the start of 2008. As a result, a jeepney driver’s daily income has shrunk by as much as P120 since the start of 2008, according to studies.

Jeepneys consume an average of 30 liters of diesel a day in a 12- to 14-hour workday. About P1,200 must be shelled out just for the fuel and a minimum of P600 as “boundary” payment to the owner of the vehicle.

Given these outlays, a driver who collects P2,000 a day in fares would earn only P200 at best. If the boundary is at P900, the driver would be in deficit.

Early this year, when diesel was at around P38 a liter, a driver earned about P220 to more than P300 for a 12- to 14-hour workday.

The militant Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide (Piston) has reacted to the deferment by urging government to immediately suspend the 12-percent expanded value-added tax (E-VAT) on oil.

Piston secretary general George San Mateo said that, according to his group’s study, the suspension of the 12-percent E-VAT will result in a P5.22 rollback in the price of diesel, a P6.36 rollback in gasoline and a P75 rollback per tank of liquefied petroleum gas (LPG).

Such a rollback, he said, would benefit consumers in general and would add P158.50 to the drivers’ take-home income.

San Mateo stressed that other measures, such as the P2 fuel subsidy and access to NFA rice, would not address the problem of oil price increases.

He said that only the suspension of the E-VAT and the Oil Deregulation Law were feasible “short-term solutions.”

He recommended the nationalization of the oil industry as a “long-term solution.”

The Piston spokesperson warned that if the government did not act on the transport sector’s concerns, which had become a “life and death issue for drivers’ families,” operators and drivers could stage a “wide-scale protest.” With a report from Leila B. Salaverria