Government not keen on transport fare hikes

Transportation Secretary Manuel Roxas

High fuel prices alone are not enough to justify a hike in jeepney and bus fares, the government said, amid calls by transport groups for drastic measures to mitigate the effect of rising costs.

But Transportation Secretary Manuel Roxas II said the Aquino administration may heed the call by transport groups to remove the 12-percent value-added tax (VAT) on fuel.

“The government is taking into consideration all factors, including potential rise in the wages and prices of commodities, in deciding on the petition of drivers and operators for a provisional increase in jeepney fares,” Roxas said.

He said increasing fares would likely lead to higher prices of basic commodities, affecting a larger part of the population. He added that higher jeepney fares could also trigger wage increases, affecting the profitability of businesses in the country.

“These things are directly and indirectly connected,” he said.

Remove VAT on oil

Roxas said the administration would study Piston’s request to remove the VAT on oil. As a senator, Roxas had called for the conversion of VAT to a “fixed” from a “percentage” tax, which meant that the government would collect the same amount regardless of movements in fuel prices.

“The timing of this proposal must be evaluated thoroughly. The public is relying so much on social services that are being funded from what we collect from VAT. These include salaries for teachers and other government programs like the conditional cash transfer,” he said.

Roxas said the issues of provisional fare increase and proposals to scrap or lower VAT were matters that the government would address, depending partly on public sentiment and feedback from other state agencies.

Likewise, Roxas said the government would take into account the price of spare parts for jeepneys and buses. The last time the government approved an increase in jeepney fares was in July 2008, when the price of diesel went up to P52 per liter.

Although the price of diesel now averages P48 per liter, the prices of spare parts have increased since 2008. Roxas said the cost of tires went up by an average of P300, batteries by P330, belts by P15 and engine oil by P60 per liter.

Originally posted at 11:49 pm | Thursday, March 15, 2012