Can we “ayuda” our way through the fuel crisis?

In early lockdown days, jeepney drivers took to the streets to ask for help from passing commuters. (Photo from AFP)

The global fuel crisis has rocked the Philippines as many drivers of public utility vehicles and ride-hailing apps struggle to make ends meet. Beaten by COVID-19 and spat on by rising costs of diesel and gasoline, public transport drivers take on 18-hour shifts only to make meager profit from the daily routes.

Profit-loss stumps

In mid-June, Inquirer reported that because of the oil price hikes, PUV drivers lost P363 per day for every 20 liters of diesel needed for short routes. This loss accumulates and often leaves drivers no other choice but to find other ways of earning. The Philippine Statistics Authority and the Move as One coalition put the loss of jobs from February to March of 2022 at 75,000.

Commuters have felt the weight of these losses too, and have tried to pay it forward. Even before jeepney fares were hiked to P11 for July, passengers were telling drivers to keep the change in hopes that this would be of some help. But as the government continues to push projects like Libreng Sakay, PUV operators say that this leaves them with fewer earning opportunities as commuters flock to free services.

Filipinos have called on the Duterte and newly minted Marcos Jr. administrations to intervene in the crisis to minimize the effects of halted public transport.

No small feat

Lowering the cost of fuel is easier said than done. The Philippines remains heavily reliant on foreign oil producers especially in the Middle East for the country’s supply. This means that if prices in the global market continue to skyrocket, so will gas and goods in the country. 

A solution proposed by many lawmakers and transport groups has been the suspension of excise tax. However, the Department of Finance has warned that doing so will affect other government programs that are funded by the tax. National debt would have ballooned and impacted economic recovery as the Philippines tries to move through the worst of COVID-19’s devastation.

For both DOF and President Marcos Jr., doling out financial aid or ayuda is the best solution available. Marcos Jr. called suspending excise tax a “blanket” solution that does not directly address the needs of the transport sector’s most vulnerable.

“Ang aking iniisip kung sino yung agad tinamaan, lumabas, ang transport, i-focus natin sa kanila, 'yung mga nangangailangan talaga; those whose livelihoods are in danger because of the increase in oil [prices], 'yun ang dapat tayo mag-focus.”

(To me, whoever has been affected, in this case, transport, we need to focus on them and those truly in need.)

At his first Cabinet meeting, Marcos Jr.—who as of this writing, has yet to name an energy secretary—announced that his administration will also look into expanding aid to include tricycle drivers who were excluded from previous tranches.

Getting the budget is one problem, but like most government projects, execution is a totally different animal.

Disbursement of aid has been slow thanks to logistical problems like the production of the fuel subsidy cards by Landbank. The processing of aid has also been at a snail’s pace, with 88% of funds disbursed as of June 16. With another wave of subsidies being floated around, Senator Win Gatchalian has called for a process expedition to keep drivers on the roads.

Marcos Jr. 's administration hopes to lean heavily on the implementation of the national ID system to speed up bureaucratic processes like subsidies but registration remains far from ideal at only over 10 million Filipinos.

Fool's tank

A sigh of relief before some more devastating economic news: Drivers saw big price rollbacks for diesel and kerosene on July 5. This is after weeks of continued price hikes saw some gas stations charge over P90/liter.

Now to the devastating economic news: PSA reported that the Philippines’ inflation rate jumped to 6.1% in June. Transport inflation alone was pegged at 17.1% increase after gasoline and diesel prices soared. The Philippine peso depreciates against the dollar, making the Philippines the worst performing economy in Southeast Asia. P1 in 2018 is worth only P0.87 in 2022.

All that means getting less bang for your buck and having to stretch your salaries as taut as they can go.

We cannot ayuda our way out of a fuel crisis that will ultimately impact the prices of food and water. As Marcos Jr. begins his first full week in office, his administration must rise to the local challenges posed by the global economy. There is no telling what the best course of action can be but there is no one solution to rule them all.