The average price of a modern jeepney is still above P2.5 million — beyond the budget of many operators struggling with the government's modernization program

MANILA, Philippines – What will the modern “King of the Road” look like?

Now that the consolidation phase for jeepneys is over, operators are expected to slowly upgrade their fleets of traditional jeepneys with modern units. The government expects to upgrade most of the country’s 150,000 jeepneys by 2030. (WATCH: [Under 3 Minutes] When will we see modern jeepneys on the road?)

These new models must comply with the Philippine National Standard for public utility vehicles (PUVs), which is set by the Department of Trade and Industry. These outline specific requirements for the size and safety features of different PUV classes. They also require modern jeepneys to have either Euro-4-compliant, electronic, or hybrid engines, or better.

As of June 20, 2024 there are 33 models of Class 2 PUV — the vehicle type most closely resembling jeepneys — that are approved by the government. Of these, 14 are imported, while 19 are considered locally manufactured or assembled. Note that a vehicle is already classified as “local” so long as at least 25% of its components are manufactured or assembled in the Philippines. That’s why models from Japanese brands such as Hino or Isuzu are considered local.

Right now, there is the big problem of price. Government officials estimate the average price of a modern jeepney to be around P2.5 million, though it could be even higher. Using a list provided by the Department of Transportation (DOTr), Rappler obtained an average price of P2.905 million based on the declared suggested retail price of at least 23 approved Class 2 PUV models. Some electric modern jeepneys imported from China cost over P6 million.

This is far above the budget of many operators, even with the paltry P280,000 in government subsidies to offset the cost. For comparison, an average brand-new traditional jeepney costs P1.2 million only, industry sources tell Rappler. (READ: Could Maharlika Fund’s investment in a jeepney manufacturer save PUV modernization?)

Some experts and manufacturers fear that the high cost of the units could raise jeepney fares, with operators struggling to pay for the monthly amortization of their new fares.

“‘Yung jeepney price po na P2.5 million, mag-i-increase ang fare natin, possibly from P27 to P40 per [passenger]. So ‘yung sinasabi ng DOTr, LTFRB [Land Transportation Franchising and Regulatory Board] na walang fare increase with modernization, hindi po yata totoo ‘yon,” said retired University of the Philippines professor and scientist Teodoro Mendoza.

(With a jeepney price of P2.5 million, our fares will increase, possibly from P27 to P40 per [passenger]. So what the Department of Transportation and Land Transportation Franchising and Regulatory Board are saying, that there will be no fare increase with modernization, I don’t believe that’s true.)

However, there is still hope that modern jeepneys will become more affordable. In fact, the government is banking on increased competition from local manufacturers to drive down price in the coming years.

For instance, local manufacturer Francisco Motors is developing a new fully electric modern jeepney, and it plans to sell the first 1,000 units for just P985,000. Francisco Motors chief executive officer Elmer Francisco told Rappler that their latest prototype will be submitted to the DOTr for certification within July.

“The 2025 model is not yet in that list, and our price is P1,997,000. This model has a range of 250 kilometers in one full charge using LiFePO4 battery already,” Francisco told Rappler on July 3.

DOTr Undersecretary of Road Transport and Infrastructure Jesus Ferdinand Ortega has also stressed that operators need not rush to purchase the still-pricey modern jeepneys since they will be given about six years to slowly upgrade their fleets.

“Just to be clear, wala pa pong bilihan ngayon ng sasakyan (there’s no requirement to buy vehicles right now),” Ortega said on June 17 at the Monday Circle Financial Forum.

He also acknowledged that some modern jeepney models — including those imported from China — still lack materials for vehicle repair and maintenance here in the Philippines. – Rappler.com