Php18,855 already lost–Jeepney drivers among biggest losers from TRAIN’s oil taxes-IBON

October 31, 2018

by IBON Media

Research group IBON said that jeepney drivers and their families have suffered huge income losses from rising pump prices on top of facing rising prices of basic goods and services. The initial and impending fare hikes give immediate relief but only temporarily. Fare hikes only worsen the burden on commuters and the government needs to take a broader view of the situation including taking both short and longer-term measures.

Jeepney drivers have lost a total of Php18,855 from start of the year until September because of the oil excise tax under the first package of TRAIN and rising global oil prices. TRAIN is to blame for around Php13,104 of this amount, said IBON. The estimated cumulative Php18,855 loss in the first nine months means an average loss in income of Php2,095 monthly, IBON explained.

Jeepney drivers and operators petitioned for a Php2 fare increase to help the sector cope with the rising prices of goods and services and the impact of TRAIN.

IBON however said that the fare hikes are still not enough to compensate for drivers’ income losses since the start of the year. Driver’s incomes fell drastically in the first six months of the year. The provisional Php1 jeepney fare hike in July compensated for pump price increases in July and August but were not enough in September when their incomes again fell as pump prices rose.

Even the full Php2 jeepney fare hike to be implemented this November, which includes the July Php1 fare increase, will not be enough to restore their earnings to pre-TRAIN levels.

IBON estimated the income losses of drivers assuming 200 passenger trips and 20 liters of diesel consumed daily, prevailing fares, and incorporating expenses for maintenance and other miscellaneous expenses. Monthly incomes from January to September were compared to that in December 2017 as the baseline income.

IBON pointed out that the government’s narrow focus on fare hikes is pitting jeepney drivers against the riding public. Both already bear the brunt of relentless price increases not just of oil but also of other commodity items including food, said the group.

The interest of both drivers and commuters is better served by giving greater attention to the drivers of inflation. “Suspending TRAIN’s oil excise taxes immediately starting with those implemented in January 2018 will give immediate relief to jeepney drivers and consumers,” IBON executive director Sonny Africa said. “The additional oil excise taxes in January 2019 should also be suspended so as not to add to already considerable inflationary pressures,” he added.

“Further fare hikes can be prevented and a rollback may even be possible if oil firms’ overpricing is reined in,” said Africa. “The long-term solution should include fuller and more responsible regulation of the oil industry,” he concluded.