MANILA, Philippines — With diesel prices breaching the ₱170-per-liter mark, the Land Transportation Franchising and Regulatory Board (LTFRB) is turning back to a pandemic-era strategy to prevent a total transport paralysis.
The agency announced on Tuesday that it will revive the Service Contracting Program, a system where the government pays Public Utility Vehicle (PUV) drivers and operators based on the number of kilometers traveled, rather than the number of passengers they carry. The goal is to ensure that essential routes remain active even as soaring fuel costs make traditional “boundary” driving unprofitable.
The Department of Transportation (DOTr) has requested ₱1 billion from the Department of Budget and Management (DBM) to fund the program’s revival. If approved, the target rollout is April 15, 2026.
The program will prioritize “high-demand” corridors and routes that support connectivity to the rail systems (LRT and MRT) in Metro Manila. It will also be implemented in other urban centers facing fuel shortages, such as Davao City and Cagayan de Oro City.
“These routes were prioritized as they… help reduce traffic congestion and improve overall commuter mobility,” said LTFRB Chair Vigor Mendoza II.
While the national government prepares its rollout, some local government units are already taking action. Manila Mayor Francisco “Isko Moreno” Domagoso announced that the city’s “Libreng Sakay” (free rides) program has increased its daily subsidy for participating jeepney drivers to ₱4,000.
Initially set at ₱3,000 last month, the subsidy was hiked twice in response to the five consecutive weeks of fuel price increases. Domagoso noted that the city has already spent approximately ₱4 million on the initiative and appealed to the private sector for support to ensure its sustainability.
The Department of Social Welfare and Development (DSWD) is also playing a role in the crisis response, offering a one-time ₱5,000 cash aid to PUV drivers through its Assistance to Individuals in Crisis Situations (AICS) fund.
However, Social Welfare Undersecretary Aliah Dimaporo warned that this is a “stop-gap measure” that could drain funds intended for medical and burial assistance. The agency estimates its current budget for the transport sector can only last until July 2026. “This assistance needs to be complemented by more long-term efforts,” she added during a Senate hearing.
The urgency of these programs is visible on the streets. Along Commonwealth Avenue and other major arteries, commuters are facing significantly longer wait times as fewer jeepneys ply their routes. The revival of service contracting aims to get these drivers back on the road by providing a guaranteed income that isn’t swallowed by the cost of the next tank of fuel.