THERE is an old saying that goes, "Those who can play, play. Those who can't play, coach. And those who can't do either get themselves elected to Congress."

OK, I made that last part up. However, the characterization seems appropriate often enough, especially since an alarmingly high percentage of Philippine legislators in both houses seem to think the first item in their job description is to "say things." Long gone are the days when the honorific sobriquet "solon" was at all applicable, because most of the things they say are either restatements of the obvious or just plain dumb.

A good example is the Thing Said by Camarines Sur Second District Rep. Luis Raymund "LRay" Villafuerte earlier this week, when he urged President Bongbong Marcos to extend the government's "Libreng Sakay" (free ride) subsidized fare program "at least until the end of the year."

The program, for which the government had budgeted P7 billion, costs between P10 million and P14 million per day, according to various sources, and has basically run out of money. It originally covered something like 140 different transit routes, the main ones being the MRT-3 light rail line and the EDSA Carousel bus route, but was only intended to run until June 30. Funding for a majority of the routes actually ran out about two weeks ago.

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Commuters alight from a bus at an EDSA carousel bus station on Main Avenue, Cubao, Quezon City on Saturday, July 2, 2022. PHOTO BY JOHN ORVEN VERDOTE
Commuters alight from a bus at an EDSA carousel bus station on Main Avenue, Cubao, Quezon City on Saturday, July 2, 2022. PHOTO BY JOHN ORVEN VERDOTE

"LRay" explained his thinking thus: "With transport costs now eating up a large share of the overall inflation rate in Metro Manila alone, the Libreng Sakay would prove to be a big help in cushioning the impact of the fuel price shock on the commuting public."

I think to most people the irrationality of that thought would be self-evident, but apparently not to the congressman, or he wouldn't have said it in the first place. Despite being obviously appealing to commuters — a free ride is a free ride, after all — the Libreng Sakay program was a bad idea when it was first hatched and is an even worse idea now. Let us count the ways.

First, it was a quick fix that guaranteed eventual commuter hardship that would be worse than if it was never implemented. It was always inevitable that it would have to end; government resources are finite. Those resources are large enough, however, that commuters could enjoy subsidized fares for a significant length of time. As most people manage their budgets on a paycheck-to-paycheck basis, what would have been their transport costs are quickly reallocated to something else — food, rent, electricity, etc. Then, when the costs suddenly reappear, they find themselves having to sacrifice something in order to meet them; it is not, politically speaking, a good way to win hearts and minds.

What is even worse is that the subsidies have ended at a time when the costs that they previously covered are much higher than they were. The BSP has already warned that inflation in June may have reached as high as 6.5 percent, and some fare increases for transport operators have already been approved.

Second, the manner in which the Libreng Sakay program has been implemented has only perpetuated one major source of inefficiency in bus transit. The program compensates operators on a fare basis rather than a flat rate contract, so the operators, who are accustomed to the "boundary" system, do what they've always done — wait at the terminals of the route or at stops along the way until their buses are as full as possible before moving. This means that from the commuter point of view, even if the ride is free, the service is terrible, with overcrowding at stations and inconsistent travel times.

Finally, the idea that the subsidized fare program is any sort of hedge against inflation is nonsensical. Subsidizing fares shifts the inflation burden away from consumers, certainly — but only temporarily, as noted above — but it does not make it go away, it simply makes costs progressively higher for the government instead. That either shortens the length of time the program can be maintained, or forces it to be progressively reduced in scope, or, as the case has turned out to be here, both. Along with that, it diverts a large amount of funds from other uses that might have otherwise provided some consumer relief, or in a worst-case scenario, forces the government to cut some other expenditures.

Extending the Libreng Sakay program would simply be throwing good money after bad, and should have never been suggested, nor allowed to take up valuable news bandwidth.

What the government can do with the funds instead, if it is determined that it should spend money with an eye to relieving the burden of transport costs, is to devote them to more sustainable solutions.

Implementing a proper service contracting scheme for the bus routes — i.e., one in which operators are paid a flat contract rate, regardless of how many passengers they carry — could be done immediately, and would be at least partially self-funding. Passengers would pay their fares to the government rather than the bus operators. These fares could be indirectly subsidized by being kept lower than what the market would otherwise dictate, and the fare revenues used to help offset the costs of the service contracts.

Funding could also be allocated to ramp up the jeepney modernization program. High up-front costs are keeping many jeepney operators from jumping in; if these were significantly reduced or even eliminated if possible, it is almost certain that most would. This would have the added benefit of keeping more transport vehicles on the road, since many operators are now parking their units due to unmanageable fuel costs.

The funding could also be allocated to offset incentives, most probably tax breaks, for employers to implement or continue work-from-home and other hybrid work arrangements. This would immediately reduce demand on the transportation system, and again, is something that could be done immediately. And it certainly should be; the impending return to regular classes for millions of students will push the system to utter collapse if something is not done quickly.

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Twitter: @benkritz