PUVs in the Philippines

Could Maharlika Fund’s investment in a jeepney manufacturer save PUV modernization?

Lance Spencer Yu

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Could Maharlika Fund’s investment in a jeepney manufacturer save PUV modernization?

Alejandro Edoria/Rappler

Whether or not the MIC’s interest in the jeepney manufacturer pushes through, Francisco Motors will pursue its plans

Elmer Francisco, heir to the Francisco Motors legacy that built a generation of jeepneys, has a lot to say about the public utility vehicle (PUV) modernization program – and not all of them are good.

One glaring problem, Francisco told Rappler, is the government’s lack of planning and funding. Under the ambitious program to upgrade PUVs nationwide, the Department of Transportation (DOTr) wants operators to eventually buy fleets of modern jeepneys, the average price of which soars up to P2.48 million, to be offset only by a government subsidy of P280,000.

“It’s like a cartel. Parang sila-sila nag-uusap ‘yung mga foreign manufacturers na dapat ganito presyo natin (It’s like those foreign manufacturers talking among themselves and agreeing on a price),” Francisco told Rappler.

Kung papansinin mo, ‘yung presyo nila halos pare-pareho (If you notice, their prices are almost all the same). That’s impossible,” he added. “Within their own costing, it shouldn’t be that high.”

Jeepney operators and drivers have taken to the streets in protest repeatedly, spotlighting the prohibitive costs of modern jeepneys, along with the issue of industry consolidation.

But Francisco Motors plans to challenge the notion of modern jeepneys being pricey by selling electric jeepneys for just P985,000 a unit. And the Maharlika Investment Corporation is listening.

In an interview, Francisco told Rappler that he had been in talks with Maharlika Investment Corporation (MIC) president and chief executive officer Joel Consing and Camarines Norte Governor Dong Padilla.

“Just recently, last week, nag-meeting kami (we had a meeting). I presented the plan together with Governor Dong Padilla,” the Francisco Motors chairman and chief executive officer said on Monday, January 8.

Ang own words ni Mr. Consing is we check all of the boxes sa mga gustong investan ng Maharlika Investment Corporation (In Mr. Consing’s own words, we checked all of the boxes of the type of investments that Maharlika Investment Corporation wants to make),” he added.

The MIC, with its approved capitalization scheme of P125 billion, is currently on the lookout for high-impact projects that contribute to nation-building. Infrastructure, power, and transportation are among the priority investment sectors identified.

“Public transportation – MIC is big on that. Kaya meron kaming next meeting. Kung hindi sila interesado, wala nang next meeting niya (That’s why we have a next meeting. If they’re not interested, there won’t be a next meeting),” Francisco told Rappler.

The next meeting – which will happen on Thursday, January 11, and will include MIC investment committee chairperson Andrew Gan – will run through the financial details of a potential investment.

Pag-aaralan namin kung paano magandang pumasok ‘yung Maharlika (We’ll study what would be a good way for Maharlika to enter),” Francisco said. “Will it be an equity infusion? Or would it be a joint venture? I don’t know. We’ll see.”

The MIC itself has been a subject of much controversy, as critics of the country’s first sovereign fund point to concerns in its sources of capital and the risk that funds could be misused. (READ: Amid ‘potential risks,’ Maharlika’s success will depend on management – AMRO)

Perhaps for this reason, Francisco has been careful to be transparent about his company’s dealings with Maharlika.

Pinost ko rin ‘yun sa Facebook para transparent. Kita na lang ng tao na nag-usap kami. Walang corruption, walang nanghihingi ng lagay, walang anything,” he told Rappler.

(I posted it on Facebook too so that it’s transparent. Everyone can see that we had a meeting. No corruption, no bribes, nothing.)

Where could the potential investment go?

Aside from its modern electric jeepney, which could roll out by the second quarter of 2024, Francisco Motors also has big plans to expand its business. Currently, it has its eyes on setting up an “integrated manufacturing facility” in an economic zone in Camarines Norte.

“’Yung ilaw, gulong, upholstery, shock absorbers, glass, windshield, windows – lahat ‘yan industry in itself. Lahat ‘yan ini-invite namin mag-locate doon sa economic zone (The lights, tires, upholstery, shock absorbers, glass, windshield, windows – all that is an industry in itself. All of them will be invited to locate in our economic zone),” he said.

His company also plans to manufacture the lithium-ion batteries for its electric jeepneys in the economic zone. Meanwhile, to support the rollout of its modern jeepneys, Francisco Motors will set up charging infrastructure in local government units and at least one terminal per province, which can service vehicles and provide spare parts.

Currently, there are no details yet on how a possible investment by Maharlika could play into his company’s plans, although Francisco said these could be discussed on Thursday. But whether or not the MIC’s interest in the jeepney manufacturer pushes through, Francisco Motors will pursue its plans.

“Our project is a go. We are not relying on Maharlika to do this,” Francisco told Rappler. “Of course, if our government is willing to help us, it’s more than welcome. But, with or without them, we will do this.” – Rappler.com

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Lance Spencer Yu

Lance Spencer Yu is a multimedia reporter who covers the transportation, tourism, infrastructure, finance, agriculture, and corporate sectors, as well as macroeconomic issues.