DBM: Contracted PUVs to receive P7 billion subsidies

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MANILA, Philippines — Besides fuel subsidies, some drivers of contracted public utility vehicles (PUVs) would also receive incentives corresponding to their number of trips despite costly oil.

In a statement Tuesday night, the Department of Budget and Management (DBM) said it released P7 billion to the Department of Transportation (DOTr) for the agency’s service contracting program.

For this temporary relief to transport players, the DBM said the Land Transportation Franchising and Regulatory Board (LTFRB) will contract PUV operators.

“PUV drivers will then receive regular performance-based subsidies based on the number of trips made per week, regardless of the number of passengers,” the DBM said.

“This will be implemented through two types of contract — net cost contracting and gross cost contracting — to ensure fair compensation of services to be provided by PUV drivers,” the DBM added.

The DBM said the LTFRB will partner with some priority local government units (LGUs) to better distribute these subsidies across public transport associations, cooperatives or corporations in their localities.

“The service contracting program forms part of the government’s targeted assistance to help cushion the impact of the consecutive oil price hikes to vulnerable sectors,” the DBM said.

The DBM this month released P2.5 billion under the DOTr’s 2022 agency budget to cover the first tranche of fuel subsidy to be distributed to over 377,000 eligible PUV drivers, who will receive P6,500 each. The government plans to release another P2.5 billion in fuel subsidies next month, to be sourced from excess collections of 12-percent value-added tax (VAT) slapped on expensive oil. At an estimated average global oil price of $110 per barrel this year, the Bureau of Customs (BOC) could collect an excess P26-billion VAT, which would be given away as targeted subsidies to vulnerable sectors.

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