Budget Watch

Lawmakers want P3-billion budget for PUV contracting in 2022

Aika Rey
Lawmakers want P3-billion budget for PUV contracting in 2022


Angie de Silva/Rappler

The Department of Transportation's service contracting program does not have a budget under the 2022 National Expenditure Program

A lawmaker said on Wednesday, September 15, that there should be at least P3 billion for public utility vehicle (PUV) service contracting in 2022, after the Department of Budget and Management (DBM) removed funding for the program.

In the Department of Transportation (DOTr) budget hearing at the House of Representatives, the agency lamented the “deletion” of the requested funds for service contracting.

Transportation Undersecretary Giovanni Lopez said the DOTr asked the DBM for a P10-billion budget for 2022 but was given none.

House transportation panel chair Edgar Sarmiento then raised the current 50% cap on public transportation because of the coronavirus pandemic. He said the DOTr’s inability to use service contracting funds pointed to “birth pains.”

“I would strongly manifest that we reassess the budget and provide service contracting an amount of no less than P3 billion in the 2022 budget,” said Sarmiento.

The Samar 1st District congressman noted, however, that P3 billion would only be good for an implementation period of six months.

Later during the hearing, DUMPER Representative Claudine Bautista supported Sarmiento’s manifestation.

Under the service contracting program, the government hires PUVs and pays the operators based on the kilometers traveled and other performance indicators – a departure from the boundary system which previously pushed drivers to accommodate as many passengers as they could.

Although not initially part of PUV modernization plans, service contracting was implemented by the DOTr as it rationalized bus and jeepney routes in Metro Manila and in other parts of the Philippines.

It was first launched as part of the department’s lifeline for PUV drivers and operators under the Bayanihan to Recover as One Act or Bayanihan 2 law, with a budget of P5.58 billion. Commuters also benefited through free rides.

While service contracting was deemed important, the Land Transportation Franchising and Regulatory Board was only able to spend around P1.5 billion before Bayanihan 2 expired on June 30.

Under the 2021 General Appropriations Act (GAA), the program has a P3-billion budget, which was only used when it was relaunched starting September 10.

That means the agency has less than four months to use the P3 billion, unless lawmakers pass a law that would extend the validity of the 2021 budget.

So far, lawmakers have been extending the life of previous GAAs despite the shift to a cash-based budget in 2019 that supposedly pushed for implementation-ready projects.

The DOTr has a proposed budget of P150.76 billion for 2022, the majority of which would go to its P112-billion railway program. – Rappler.com

Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.