PUV fare hike suspended

Philippine President Ferdinand R. Marcos, Jr. on Wednesday suspended the fare increase for public utility vehicles (PUVs), a day before its implementation.

In a video message, Mr. Marcos said he directed the Department of Transportation (DoTr) to defer the hike scheduled for Thursday, adding that now is not the right time to raise fares despite soaring pump prices.

“This may not be the right time to increase fares for our fellow citizens,” he said in Filipino.

The Department of Transportation (DoTr) said it has deferred the implementation of PUV fare adjustments to help ease the burden on commuters.

Transportation Acting Secretary Giovanni Z. Lopez said the agency is exploring other programs and initiatives to support drivers and commuters, such as free rides and the expansion of fuel voucher distribution.

The Land Transportation Franchising and Regulatory Board on Tuesday approved fare increases for PUVs, reflecting the spike in fuel, maintenance and operating expenses since the Iran war began.  It covered jeepneys, provincial and city buses, airport taxis, and transportation network vehicle services.

Mr. Marcos assured transport workers that the government will ramp up support as it began its cash relief distribution for tricycle drivers in the capital region on March 17.

Other PUV workers are scheduled to receive aid in the coming weeks.

“Transport workers should not worry; we will expedite and increase support for you so that you won’t be burdened too much,” Mr. Marcos added.

The DoTr said it is expediting the release of fuel subsidies for qualified PUV drivers and operators as additional assistance.

Mr. Lopez said the DoTr is also coordinating with toll operators for the possibility of offering discounts to motorists.

BusinessWorld sought comments from toll operators Metro Pacific Tollways Corp. and San Miguel Corp. but had not received a response as of deadline.

Meanwhile, transport group Manibela is set to stage a transport strike to protest the government’s suspension of fare adjustments, stressing that this move further burdens drivers already reeling from high pump prices.

“The government should have thought things through before suspending the increase, this would add another burden to our drivers and operators,”  Manibela Chairman Mar S. Valbuena told BusinessWorld on Wednesday.

Mr. Valbuena also noted the approved fare increase was not enough to compensate drivers as fuel expenditure accounts for the majority of drivers’ daily earnings.

The DoTr also clarified that the suspension order applies only to fare adjustments for land transport. The higher fuel surcharge for airlines from April 1-15 remains in effect, along with Maritime Industry Authority’s  authorization for ship operators to collect up to 20% of base fares as a fuel surcharge.

MRT, LRT fare discounts

The President said the operators of the Metro Rail Transit (MRT) and Light Rail Transit (LRT) will also give fare discounts.

“Even if there is a major disruption happening, it will only be felt a little, or we can do it, hopefully, our people will feel nothing in their daily work, among our students who come to school every day,” he added.

Benjamin B. Velasco, an assistant professor at the University of the Philippines School of Labor and Industrial Relations, said the government’s reversal on the fare hike highlights a lack of clear policy coordination, sending mixed signals amid a fuel and cost-of-living crisis.

“Even if the fare hike was suspended, the demand for a wage hike will not be muted since prices of other basic necessities — like food and electricity — are rising still,” he said via Facebook Messenger.

“If the costs of living are increasing, then why are wages not being adjusted too? It behooves the government to also call for a tripartite industrial summit to tackle this concern,” he added.

Mr. Velasco recommended a transport summit to discuss measures such as service contracting and “libreng sakay,” ensuring no operator or worker is unfairly disadvantaged.

No emergency powers for now

Also on Wednesday, Mr. Marcos said he is uncertain when or whether he will use the proposed emergency powers to cut fuel excise taxes despite certifying the measure as urgent.

The possible move on fuel excise taxes is contingent on global price movements amid uncertainties from the escalating conflict, he said, noting there are many things to consider.

Both chambers of Congress have already passed separate measures allowing the President to cut or halt the excise tax on fuel under certain conditions.

“That depends. That’s a very complicated calculation,” he told reporters during a market visit in San Juan City. “When the situation calls for it, then we will see when to exercise that power and by how much.”

According to Mr. Marcos, the country has enough supply of oil and food, urging Filipinos not to hoard as “everything is normal.”

Fuel prices spiked on Tuesday, March 17, with gasoline rising by PHP 12.90 to PHP 16.60 per liter, diesel by PHP 20.40 to PHP 23.90 and kerosene by PHP 6.90 to PHP 8.90.

Monitoring by the Department of Energy showed pump prices could climb as high as PHP 91.60 per liter for gasoline, PHP 114.90 for diesel and PHP 143.79 for kerosene.

“Right now, we don’t have a problem with the supply of food, and we don’t have a problem with the supply of petroleum products, including fertilizer for farmers,” Mr. Marcos said in mixed English and Filipino.

Analysts said suspending fuel excise taxes offers limited relief amid global oil volatility, with domestic prices still driven by import costs and Middle East supply disruptions. 

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., noted that while excise tax cuts provide immediate relief, they are a blunt tool.

“A better approach is targeted support for transport, agriculture, and power, while accelerating fuel diversification,” he said via Viber.

Foundation for Economic Freedom President Calixto V. Chikiamco said that the impact of the suspension would be modest — roughly PHP 10 per liter for gasoline and PHP 6 for diesel.

“It would also reduce much-needed government revenue, which could have funded additional schools or infrastructure,” he said via Viber.

Both analysts cautioned that tax relief alone will not stabilize oil prices or shield consumers from broader cost-of-living pressures.

On March 17, Finance Secretary Frederick D. Go said it is premature to push for a fuel excise tax cut, as the government is still assessing the impact of the ongoing conflict and oil price movements.

Instead of an immediate tax cut, economic managers are prioritizing alternative relief measures, including boosting fuel buffer stocks, rolling out targeted subsidies for transport and vulnerable sectors and coordinating with oil firms to manage price increases.

The Senate approved on third and final reading a bill granting Mr. Marcos the authority to suspend or reduce fuel excise taxes to cushion the impact of rising oil prices.

The measure allows the President to act when the Mean of Platts Singapore crude benchmark averages at least USD 80 per barrel for a month prior to the order.

The proposal differs from the version passed by the House of Representatives, which requires the declaration of a national emergency or calamity before tax relief can be implemented.

Lawmakers in the House also included additional conditions for the automatic suspension or reduction of excise taxes. — Chloe Mari A. Hufana, Reporter with Ashley Erika O. Jose