P7K daily needed for P2.8-M worth modern jeep? LTFRB says there are cheaper units

[Lee]

Quote

 

As much as P7,000 per day is needed so that transport cooperatives can pay their loans and drivers would earn enough for their family if they would get a modern jeepney worth P2.8 million, 1 Rider party-list Representative Bonifacio Bosita said Wednesday.

“Based on [state-run bank] Landbank computation of granting loans at 6% annual interest payable for seven years and at P2.8 million per unit, a cooperative would need to raise P40,000 monthly to pay for each unit. This amount excludes fuel, facilities, cooperative management, maintenance and other mandatory expenses. (Recall an interview where a driver stated that his boundary in Manila was 900Php per day)

Each unit would need to earn P4,000 to P5,000 a day for these expenses [of loan payment and maintenance], excluding the amount that the driver will earn. If drivers are looking at earning P1,500 or P2,000 per day, that would be P7,000 per day,” Bosita said during the House transportation panel inquiry on the PUV modernization program.

Asked by lawmakers if Bosita’s computation was accurate, Land Transportation Franchising and Regulatory Board chairperson Teofilo Guadiz III responded by saying “The computation is based on the acquisition cost of P2.8 million. We have [modern] jeepneys that cost P980,000 [each].”

House committee on transportation chairperson Romeo Acop then cut Guadiz and said, “What we are asking is that, is the computation by Honorable Bosita accurate?”

“We respectfully differ with the computation of Honorable Bosita based on certain premises,” Guadiz said.

Acop then replied, “[So] it is not accurate?”

Guadiz said, “I would not say it is not accurate if the cost of a vehicle is P2.8 million [per unit].”

Such response further irked Acop, saying that “Nagdedepensa ka agad eh. Yes or no, accurate ba iyon (You are already defensive. Yes or no, it is accurate)?”

Guadiz then said that he cannot respond categorically to such a question.

“We wish to qualify that to a certain degree, no [it is not accurate], your honor,” he said.

1-Sagip party-list Rep. Rodante Marcoleta then asked Guadiz if Bosita’s computation is accurate on the basis of a P2.8 million cost of a modern jeep per unit, to which Guadiz replied, "Yes, your honor."

He said that if each modern jeep would cost P900,000 to P1.8 million, the required daily income to be able to pay loans and other dues “would drastically go down.”

 Bosita, however, said that even for a P1.6 million worth of modern jeepney, that said unit would still need to raise P25,000 a month to pay for the loan alone based on Landbank terms.

 

“I have basis. So do you [in the LTFRB] even have an idea how much would the fares should be para makabayad sa utang at kumita naman ang mga driver (to pay loans and earn income)?” the lawmaker said.—AOL, GMA Integrated News

P7K daily needed for P2.8-M worth modern jeep? LTFRB says there are cheaper units (msn.com

[hk blues]

Whilst I am in no way suggesting that Chinese-made vehicles are of a high quality, I wonder how good the cheaper alternatives are?  False economy maybe.

[fillipino_wannabe]

13 hours ago, Lee said:

“I have basis. So do you [in the LTFRB] even have an idea how much would the fares should be para makabayad sa utang at kumita naman ang mga driver (to pay loans and earn income)?” the lawmaker said.—AOL, GMA Integrated News

P7K daily needed for P2.8-M worth modern jeep? LTFRB says there are cheaper units (msn.com

So 25k per month loan, maybe 15k per month more than buying an old jeepney. They'll save that in the better fuel economy alone. They said their old jeepneys were only getting 3.5km per liter when they were whining about the gas prices last year, my wifes 2 ton freezer truck does more than that lol.

https://www.bworldonline.com/top-stories/2022/03/09/434747/pressure-to-raise-jeep-fares-grows/#:~:text=Mendoza II of 1-UTAK,the board during the hearing.

Edited January 11 by fillipino_wannabe

[GeoffH]

15 hours ago, fillipino_wannabe said:

So 25k per month loan, maybe 15k per month more than buying an old jeepney. They'll save that in the better fuel economy alone.

25k a month loan payment sounds too low for a 2.8 million peso loan to me.

Toyota Philippines listed price for their 28 seat Coaster bus is 4 million Pesos and with a 20% down-payment monthly loan payment is 75k.

Assuming similar interest rates from the Chinese bus suppliers and a price of 2.8 million peso the monthly loan payment would be 28/40x75000 which is 52500 peso per month.

Assuming a 0% down-payment (more realistic for a jeepney owner/operator) then the monthly payment would be... ummm... 5/4x52500 which is 65625.

That's over 2000 peso per day just for the loan.

 

Edited January 12 by GeoffH

[Mike J]

6 hours ago, GeoffH said:

25k a month loan payment sounds to low for a 2.8 million peso loan to me.

Agree.  84 payments of 25K only come to 2.1 million peso.

I had to use an online loan calculator to figure out what think the loan is.

If the buyer puts down 1/3 of the purchase price, the payments will work out as described in the article at 6% for 84 months.   So a down payment of approximately 924K peso would be required.  The calculator I used required dollars and I used 55 to 1 so the number may be a bit off.   1/3 down is quite a bit to swallow and probably the only reason the bank is willing to loan at 6 percent.

I also agree with @hk blues. buying cheap can end of more expensive in the long run. 

[hk blues]

11 hours ago, GeoffH said:

25k a month loan payment sounds to low for a 2.8 million peso loan to me.

Toyota Philippines listed price for their 28 seat Coaster bus is 4 million Pesos and with a 20% down-payment monthly loan payment is 75k.

Assuming similar interest rates from the Chinese bus suppliers and a price of 2.8 million peso the monthly loan payment would be 28/40x75000 which is 52500 peso per month.

Assuming a 0% down-payment (more realistic for a jeepney owner/operator) then the monthly payment would be... ummm... 5/4x52500 which is 65625.

That's over 2000 peso per day just for the loan.

 

 

4 hours ago, Mike J said:

Agree.  84 payments of 25K only come to 2.1 million peso.

I had to use an online loan calculator to figure out what think the loan is.

If the buyer puts down 1/3 of the purchase price, the payments will work out as described in the article at 6% for 84 months.   So a down payment of approximately 924K peso would be required.  The calculator I used required dollars and I used 55 to 1 so the number may be a bit off.   1/3 down is quite a bit to swallow and probably the only reason the bank is willing to loan at 6 percent.

I also agree with @hk blues. buying cheap can end of more expensive in the long run. 

I'm unsure as to where the 25k per month number comes from - the article states 40k per month based on 7 years, 2.8m and 6%.

The 25k per month is for the much cheaper 1.6m unit.  

Edited January 12 by hk blues

[Mike J]

16 minutes ago, hk blues said:

 

I'm unsure as to where the 25k per month number comes from - the article states 40k per month based on 7 years, 2.8m and 6%.

The 25k per month is for the much cheaper 1.6m unit.  

You are correct.  I misread the article.  Thanks for pointing that out. 

[GeoffH]

4 hours ago, Mike J said:

So a down payment of approximately 924K peso would be <snip>  @hk blues

I can't imagine most owner/operator single jeepneys would be in a position to deposit 924k.

Maybe owners of multiple jeepney contracts with employed drivers could.

 

[hk blues]

6 minutes ago, GeoffH said:

I can't imagine most owner/operator single jeepneys would be in a position to deposit 924k.

Maybe owners of multiple jeepney contracts with employed drivers could.

 

I suppose that's one of the goals, to perhaps reduce/eradicate the number of one-man-band operations which may be less likely to have well-maintained vehicles.  

[fillipino_wannabe]

19 hours ago, GeoffH said:

25k a month loan payment sounds too low for a 2.8 million peso loan to me.

Toyota Philippines listed price for their 28 seat Coaster bus is 4 million Pesos and with a 20% down-payment monthly loan payment is 75k.

Assuming similar interest rates from the Chinese bus suppliers and a price of 2.8 million peso the monthly loan payment would be 28/40x75000 which is 52500 peso per month.

Assuming a 0% down-payment (more realistic for a jeepney owner/operator) then the monthly payment would be... ummm... 5/4x52500 which is 65625.

That's over 2000 peso per day just for the loan.

 

The 1.6 mil at the bottom of the article, it wouldn't let me part quote it sorry.