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(Look) How Jeepney and Bus Fare Hikes Will Affect Inflation

Increases in the cost of transportation have been rising faster than the consumer price index
By Pauline Macaraeg |

 

 

Though jeepney drivers’ groups and bus companies have been clamoring for a fare hike as far back as September 2017 and February 2018, respectively, the government agreed to grant their petitions only now.

 

One reason for the delayed response is the worry that the fare hikes will contribute further to the surge in the inflation rate, or the increase in overall consumer prices, which hit a nine-year high of 6.7 percent in September.

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Even without the fare hikes, transportation costs already rose by eight percent, driven by higher prices of gasoline, diesel and other fuel products. It was the third fastest-rising item in the consumer price index, next only to alcoholic beverages and tobacco, and food and non-alcoholic drinks.

 

The fares newly approved by the Land Transportation Franchising and Regulatory Board (LTFRB) will likely push up not just transport costs but overall consumer price inflation too. Though transport constitutes just a small portion of the consumer price basket, it affects the retail prices of food and other goods that need transporting.

 

Covering the approved provisionary rates in LTFRB’s department orders are buses both in Metro Manila and the provinces, as well as jeepneys in the National Capital Region, Region 3 and Region 4.

 

The new minimum fare for jeepneys now stands at Php10, a Php2 increase from the current Php8 rate. The board granted the petition to make permanent the provisional Php1 increase earlier approved in July, and also permitted an additional Php1 on top of that. However, it rejected the petition to increase fares for every succeeding kilometer “for lack of factual and reasonable basis.”

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Likewise, the LTFRB also approved a Php1 increase in the first five kilometers for buses in Metro Manila. For provincial buses, an increase of Php0.15 per kilometer was granted. (See table)

 

 

The board signed the decisions on Thursday, October 18. The new fares will be effective 15 days after, or in early November.

 

 

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Pauline Macaraeg is Entrepreneur PH's data journalist

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