Minimal fee from riders, govt compensating drivers, operators: a more viable service contracting model for public transport

Designed properly and regulated using proper data on the operations and expenses of all public utility vehicles (PUVs) plying in a particular route, government service contracting can precisely compensate for extraordinary fuel costs incurred in-between fare adjustments. This is similar to bills sent by public utilities in the power sector that include belated recoveries due to higher-than-expected fuel/operations of generation plants, among other items.

The first Department of Transportation (DoTR) order implementing service contracting was issued in September 2020 using funds made available from Bayanihan I (RA 11494). It was meant to support operators and drivers to comply with COVID-19 physical distancing requirements and its corresponding costs that they had no way to recover, from 2020 to 2021. Also, only a very small number of the PUV fleets could be mobilized because of the quarantines and people’s fear of being infected, which meant that PUV operators had no income with which to pay for fixed maintenance, rentals, and utility expenses.

In 2022 the rationale for service contracting has changed as conditions started to normalize and as PUVs are allowed to take on full loads. By mid-year the service-contracting budget was almost fully used up, though excess revenues from VAT on expensive oil can be used to provide additional budget. Service contracts were used to provide free rides, and in a second modality, to add to the revenues of PUVs in cases where fares collected do not suffice to call forth a sufficient number of PUVs.

Service contracting is a mechanism designed to enable fair returns for a limited number of drivers and operators, or social amelioration, though this is also the objective of Pantawid Pasada. But in addition, through LTFRB MC 2022-031 which implements the 2022 GAA fund of P7 billion, service contracting is a tool that can be used to call forth additional PUV services during particular times within particular routes, and also, to improve service standards. If designed properly and with the regulator having digital information on the operations and expenses for different PUVs on the roads, a service contract can also be a mechanism that can precisely compensate for extraordinary fuel costs incurred in-between fare adjustments. This would not be too different from bills sent by public utilities in the power sector that include belated recoveries due to higher-than-expected fuel/operations of generation plants, among other items.

The simplest arrangement that can theoretically assure all the objectives above are met is if the government would collect all the fares paid by the commuters and then compensate the drivers and operators according to a service contract awarded through bidding. If the fares are not enough to cover the costs, then the government could fill the deficiency using revenues from general taxes, or perhaps from road users’ taxes.

Alternatively, the drivers and operators in a particular route, e.g., the PUV cooperative can collect the fare and the government can then cover the expenses that the fares cannot pay for. Regulated fares meant to encourage ordinary people to afford them and so that PUVs is preferred over using private vehicles are typically not enough to cover the expenses of operation.

If there were not enough PUVs on certain routes during certain times, say, because there were not enough passengers going towards a terminal, but far too many waiting in line to catch a ride home, the government can require more vehicles to be on standby to be used to raise the frequency of PUVs going to the busy terminals during peak hours, even if the vehicles would be idle during off-peak hours and empty going to designated areas.

Such higher service levels would entail higher costs, so well-defined price adjustment mechanisms need to be in place. If the contractor and government cannot come to an agreement on the proper compensation for amendments to the service contract—the operators (joint venture project companies) can come and go but the employees or their coops can conceivably remain as part of area-wide joint ventures that can join the new project company and contract with the government.

In the context of the PUV modernization program in the Philippines, Sunio et al (2022) mention without providing the reference, that the Land Transportation Franchising and Regulatory Board
(LTFRB) and the DOTR imagine that the new route assignments with only one or two consolidated operators can subsequently become the service contractors, and either the LGU or a metropolitan corporation composed of different LGUs can contract and pay for the services.

This proposal might work for hyper-local routes. In the case of routes connected to major toll roads, ports or other high capacity transit hubs, it makes sense for the national government to also play a part in designing and financing the service contracts, and perhaps also in promising to undertake actions that will ensure efficient operations: for example through the provision of dedicated lanes and the provision of well-designed loading stations and fare collection systems. The national government would be interested in maximizing the ridership and revenues for example of trains financed through loans—to entice people to shift to public transport and use not only trains but also buses and jeeps going to intended destination on time and enough to rival private cars in the convenience they offer.

As in many cases of actually existing service contracting arrangements in other countries such as Brazil, Germany, Malta, Russia, the USA and others, there is evidence that the right contractual design and terms cannot be hit upon on the first try. Incremental improvements and even improvisation would seem to be the rule rather than the exception during the early stages. The prioritization of routes to be given service contracts, the service dimensions and levels, the compensation methods, the manner of renegotiation of contract terms and the assignment of risked must evolve gradually from simple towards more sophisticated forms over time — as the gathering of information on costs and performance becomes automated, ridership hopefully shifts to more public modes with the volume of private vehicles on the road reduced, and as public regulatory capacity improves.

The situation in the Philippines gets further complicated by the transitions being induced by the PUV modernization program. To respond, for example, to the clamor of operators and drivers for greater subsidies to enable decent take home pays - the transition towards service contracting might introduce a gradual increase in the proportion of modern jeeps in the service contractor’s fleet and the compensation can include a capital subsidy (for which the government and or commuters will be entitled to returns or shares in the service contracting joint venture company).

Other considerations that deserve further investigation and maybe experimentation can include increases in road users fees so that the DOTR and the LGUs can have a sustained source of revenues for the service contracts. A law may be passed to provide the resources and the predictability the PPP service contracting arrangements will require.

 


Jude Esguerra is a fellow at LEARN.


References

Land Transportation Franchising and Regulatory Board. (2021). LFTRB MC 2022-031 Implementing Guidelines of the PUV Service Contracting Program under the General Appropriations Act of 2022.

Sunio, V., W.J. Li, J. Pontawe, A. Dizon, J.B. Valderrama, A. Robang. (2022). "Service contracting as a policy response for public transport recovery during the Covid-19 Pandemic: A preliminary evaluation." Transportation Research Interdisciplinary Perspectives. Vol 13, March 2022. 100559.


Paano maging member ng SSS ang mga kasambahay?

Q: Ako po si Steph, 33, may dalawang anak. Namasukan po ako bilang kasambahay noong medyo lumuwag na ang lockdown itong January 2022. Gusto ko pang magka-SSS, paano po ang aking gagawin?

A: Dahil sa Batas Kasambahay, karapatan mo ang maging miyembro ng SSS at magkaroon ng mga benepisyo ng isang miyembro (Tingnan ang BOX 3 para sa mga benepisyo).

Ang pag-apply para sa SSS ng mga kasambahay ay kasabay na rin ng PhilHealth (Philippine Health Insurance Corporation), at sa Pag-IBIG (Home Development Mutual Fund), sa ilalim ng isang unified system of registration and enrollment, o tinatawag na KURS (Kasambahay Unified Registration System).

Sa ilalim ng KURS ay isang form na lang ang kailangang punan para sa SSS, Philhealth, at Pag-IBIG.

BOX 1: KASAYSAYAN

Noong January 18, 2013 ay isinabatas ang Batas Kasambahay (RA No. 10361: An Act Instituting Policies for the Protection and Welfare of Domestic Workers), upang lalong pagtibayin ang layunin ng SSS na magkaroon ng protection at coverage ang mga Kasambahay, o Domestic Workers, tulad ng mga regular na empleyado. Sinumang kasambahay na tumatanggap ng sahod na di bababa sa P1,000.00 kada buwan at may edad na 60 anyos pababa ay saklaw nito.

May mga hakbang sa pag-apply.

STEP 1: Kumuha ng sumusunod na forms sa anumang SSS branch o service office o i-download sa mga website www.sss.gov.ph , www.philhealth.gov.ph , at www.pagibig.gov.ph .

  • Kasambahay Unified Registration Form (PPS-KUR Form). Maaari rin i-click ang link na ito para sa PPS-KUR form.

Ganito ang hitsura ng form:

  • Household Employer Unified Registration Form (PPS-HEUR1 Form)
  • Household Employment Unified Report Form (PPS-HEUR2 Form)

STEP 2: Punan ang mga form.

  • Ang PPS-KUR Form ay kailangang punan ng kasambahay
  • Ang PPS-HEUR1 at PPS-HEUR2 forms naman ay para sa amo o employer.

BOX 2: SINO ANG KASAMBAHAY?

Ang mga Kasambahay o Domestic Workers ay ang mga indibidwal na gumagawa ng mga trabahong pantahanan at pinasasahod para sa pag-render ng mga ganitong services. Kasama sa mga naturang gawain ay ang paglalaba, pagluluto, paglilinis, pagiging yaya, pati na rin ang iba pang maaaring iutos ng household employer. Ang Household Employer naman ang sinumang kumukuha ng serbisyo ng mga Domestic Workers.

STEP 3: Ihanda ang iba pang dokumento para makapagrehistro.

Maliban sa PPS-KUR Form para sa kasambahay, kakailanganin rin ng supporting documents. Maaaring magsubmit ng isang (1) primary document, o dalawang (2) secondary document kalakip ng PPS-KUR Form.

Ang mga primary documents ay ang sumusunod:

  • Birth certificate mula sa Philippine Statistics Authority (PSA, dating National Statistics Office)
  • Baptismal certificate mula sa simbahan
  • Driver’s license
  • Passport
  • Professional Regulation Commission (PRC) card
  • Seaman’s book

Kung walang primary documents ay maaaring magsubmit ng dalawa (2) sa mga sumusunod na secondary documents:

  • Birth or baptismal certificate of domestic workers’s child
  • ATM card bearing the cardholder’s name
  • ATM card and certification from the bank stating that the account number belongs to the cardholder, if name does not appear on the card
  • Bank account passbook
  • ID card from the local government units (ex. barangay, municipality, city)
  • Marriage contract
  • National Bureau of Investigation clearance
  • Police clearance
  • Postal ID
  • School ID
  • Senior citizen card
  • Tax Identification Number (TIN) card
  • Voter’s ID/Affidavit
  • Company ID
  • Sertipikasyon mula sa National Commission on Indigenous Peoples o mula sa Office of Muslim Affairs 16. Fisherman’s card mula sa Bureau of Fisheries and Aquatic Resources
  • Health o medical card
  • Temporary license o student permit mula sa Land Transportation Office
  • Transcript of school records

PAALALA

Kailangan ang original o certified true copy ng mga documents para sa verification. Kung hindi naman makakapagsubmit ng supporting documents ay mabibigyan pa rin ng SSS number ang miyembro dahil gagamitin ito para sa remittance ng contribution at household employer’s report. Makakapag-claim lamang ang mga miyembro ng benefits at privileges kung sila ay qualified at may kumpletong documents.

STEP 4: Mabibigyan ang kasambahay ng SSS number, at SSS Household employer number naman para sa employer.

Kailangan ng employer na magsubmit rin ng two (2) copies ng Employment Report (SS Form R-1A) at Specimen Signature Card (SS Form L-501) na maaaring i-download sa www.sss.gov.ph.

STEP 5: Pumunta ka at ang iyong employer (o ang representative niya) sa anumang branch o service office ng SSS para makapagregister, dala ang accomplished PPS-KUR form (para sa kasambahay), supporting documents, at PPS-HEUR1 form (para sa household employer).

Kung sakaling walang kumpletong dokumento ay hindi mabibigyan ng UMID (Unified Multi-purpose Identification) card ang miyembro, at sya ay mabibigyan lamang ng “Temporary membership status”.

Kung representative lang ng amo mo ang makakasama sa pag-process, kailangan ng Letter of Authorization na may pirma ng household employer at valid ID ng representative ng amo mo.

STEP 6: Magbayad ng kontribusyon.

Magkano ang contribution na babayaran ng kasambahay at ng household employer?

Kung ang kasambahay ay sumasahod ng mas mababa pa sa P5,000 kada buwan, ang household employer ang magbabayad ng kabuuan ng contribution.

Kung P5,000 pataas kada buwan naman ay may share ang kasambahay sa pagbabayad, at ito ay ikakaltas na ng household employer sa sahod, at saka isasama sa ibabayad kasama ang employer’s share.

Ang employer ay kailangan rin magbayad ng Employees’ Compensation contribution (P10 kada buwan kung ang sahod ng kasambahay ay mababa sa P14,750, at P30 naman kung P14,750 pataas.)

BOX 3: MGA BENEPISYO

Ito ang mga SSS benefits na maaaring makuha ng mga kasambahay:

  • Sickness Benefit
  • Maternity Benefit
  • Disability Benefit
  • Retirement Benefit
  • Death Benefit
  • Funeral Benefit
  • Benefits under the Employee’s Compensation (EC) Program
  • Unemployment Benefit
 


PAALALA

Maaari lamang makuha ng mga miyembro ang benefits kung qualified at may kumpletong documents sa pagproseso. Ang pagkakaroon ng SSS Number ay hindi garantiya para sa pagkakaroon ng benefits.

Ilang percent ang dapat na ihulog bilang contribution?

Ang bagong SSS contribution rate ay 13% ng sahod, kung saan ang 4.5% ay mula sa kasambahay, at 8.5% naman mula sa household employer. Ang monthly salary credits na pagbabasihan ng 13% ay naglalaro ngayon mula P3,000-P25,000.

Table 1. Contribution rate sa SSS

Contribution Share
Employee share 4.5%
Employer share 8.5%
Total 13.0%
Source: SSS.

 

Tuwing kailan ang paghuhulog ng contribution?

Ito ay ibabase sa Household Employer ID number ayon sa schedule na ito:

Table 2. Schedule ng pagbabayad ng contribution

Kung and ika-10 numer ng Household Employer ID No. ay nagtatapos sa: Deadline ng pagbabayad (pagkatapos ng naaangkop na buwan)
1 o 2 ika-10 araw ng buwan
3 o 4 ika-15 araw ng buwan
5 o 6 ika-20 araw ng buwan
7 o 8 ika-20 araw ng buwan
9 o 0 huling araw ng buwan
Source: SSS.

 

Mga dagdag paalala sa pagbayad
Kung sakaling ang payment deadline ay matapat ng Saturday, Sunday, or national holiday, maaring magbayad sa susunod na working day. Ang late payments ay may karampatang penalties kaya mainam na magbayad sa takdang panahon.

Ang contribution ay maaaring bayaran sa mga SSS Tellering Counters, Bank Collection Partners, and Nonbank Collection Partners.

Real-time processing na ang mga contribution kaya ito ay magrereflect agad upon payment na maaaring makita sa pamamagitan ng Electronic Contribution Collection List (e-CCL) via SSS online.

Nakadetalye ang steps para sa e-CCL sa link na ito: https://www.sssguides.com/employers-guide-creating-electronic-contribution-collection-list-e-ccl-sss/

Para sa karagdagang paglilinaw ay maaaring bumisita sa website na ito: www.sss.gov.ph.


Sources

SSS Gabay sa pagsaklaw sa mga kasambahay (bilingual).
https://www.sss.gov.ph/sss/DownloadContent?fileName=2018_GABAY_SA_KASAMABAHAY_FINAL-June28.pdf

How to register for the kasambahay unified registration system.
https://www.sssguides.com/register-kasambahay-unified-registration-system/

SSS Contribution Schedule 2022.
https://sssinquiries.com/contributions/sss-contribution-schedule-2022/

Kasambahay Unified Reg Form.
https://www.sss.gov.ph/sss/DownloadContent?fileName=SSSForm_Unified_Registration_Form_Kasambahay.pdf

Employer’s guide: creating an electronic contribution collection list (e-CCL).
https://www.sssguides.com/employers-guide-creating-electronic-contribution-collection-list-e-ccl-sss/

New contribution schedule.
https://www.sss.gov.ph/sss/DownloadContent?fileName=2021-CONTRIBUTION-SCHEDULE.pdf