Is ‘collusion’ behind high modern jeepney prices? Quimbo urges PCC probe

The Philippine Competition Commission (PCC) should look into the possibility of a "tacit collusion" among modern jeepney manufacturers, amid the high price tags for the units seven years since the public utility vehicle (PUV) modernization program was introduced, House appropriations panel senior vice chairperson Stella Quimbo said Thursday.

“Simple lang naman po ang aming hinahanap. Why is it that apparently, there is no competition [among modern PUV makers] kaya mataas ang presyo. Doon sa kakaunting supplier, bakit ang laki ng price range? P1.6 million to P2.4 million per unit. Anong meron doon?” Quimbo, a former PCC commissioner, said during the House transportation inquiry on the government’s PUV modernization program, which requires PUV units to be equipped with at least a Euro 4 engine to be deemed roadworthy.

(What we are looking for is simple. Why is it that apparently, there is no competition, and that is why the price of per modern PUV unit is so expensive. With so few suppliers, why such a wide price range? P1.6 million to P2.4 million per unit. What's going on there?)  

“Meron kayang pagkakasunduan doon sa kakaunting suppliers? You [in the PCC] are saying mergers, acquisitions. I don't think that this is about merger. Baka ang pwedeng nangyari rito ay nagkakaroon ba ng pagkakasunduan dito sa kakaunting suppliers. Is there a tacit collusion na, 'O, a, dito lang tayo, ito lang presyuhan, dito na lang tayo. Huwag na tayo magpababaan.' Baka pwede niyo tignan,” Quimbo pointed out.

(Could there possibly be an agreement among these few suppliers?...Maybe they agreed among themselves that, "Our prices will just remain in this range, we won't bring down these prices anymore." Maybe you can look into this.) 

Quimbo said that it is illogical that the prices for these modern PUVs should be so high when the market for them can hardly afford it, and that even car loans offered by banks offer much lower interest rates.

In the PUV modernization program, the government subsidy is pegged at P260,000 per modern jeepney.

The transport service cooperative and/or entity, composed of the drivers of the modern PUV units, would then have to pay off loans from state-run banks that would finance the rest of the cost at an annual interest rate of 7%.

“Secondly, [where is the] competition among financiers? Why is this limited to [state-run] Landbank and Development Bank of the Philippines (DBP). Why are private banks not involved here?” Quimbo said.

“Pag titignan po natin, Mr. Chair, 7% ang interest rate. Tignan natin ang car loans. Tinignan ko po, hindi po ako makatulog. Taas ng 7%. Have we looked at the interest rates of other banks for the same, more or less, 13-seater van? Metrobank even offers a lower 4.6%,” Quimbo added.

(Let us just look at the car loans, and I did. I was not able to sleep. Seven percent interest is too high.) 

The PCC, she said, should do its job of probing the absence of competition among modern PUV makers and  financiers to bring down the cost of these modern jeeps.

“So the question here is, why are private banks not involved here? To the PCC, don’t confuse us with your terms of mergers, acquisitions and what not,” she stressed.

“Bakit hindi niyo mapababa iyong presyo na tila overpriced? Bakit? Bakit hindi nag-wowork ang market forces? Iyon po,” Quimbo added.

(Why can't you bring down these prices which seem overpriced? Why? Why is that the market forces are not able to dictate the price. That is the point here.)

PCC chairperson Michael Aguinaldo responded to Quimbo by saying, “These are well heard and we will look into it.” — BM, GMA Integrated News