DOTr units collide over P200 million maritime subsidies

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April 13, 2026 | 12:00am

MANILA, Philippines — With limited resources in hand, two agencies under the Department of Transportation (DOTr) are clashing on how to use the P200-million budget for service contracting in the maritime sector.

A document obtained by The STAR showed the Philippine Ports Authority (PPA) had opposed the proposal of the Maritime Industry Authority (MARINA) to roll out a service contracting program (SCP) that gives out free rides to passengers.

Under MARINA’s proposal, the DOTr will sign contracting arrangements with shipping lines to provide free rides for passengers on inter-island voyages.

The proposal is expected to benefit as many as 118,000 passengers a day, but will cost as much as P558 million a week. If the MARINA proposal is adopted, the DOTr’s P200-million budget will only last three days.

As such, the PPA crafted an alternative proposal called Pandagdag Pamasahe Program (PPP), under which passengers will still pay a baseline fare for their trips equivalent to rates prior to recent price hikes.

However, they would no longer have to pay fuel-related increases of up to 30 percent, as the PPP will use the service contracting budget to shoulder them.

The PPP will apply only to passengers in the economy class, as the PPA said they are the most sensitive to price increases.

The PPP will also cover select routes only, identified by the PPA as some of the busiest corridors, to target only the most important to inter-island connectivity.

As proposed, the PPP will run in Batangas-Calapan and Capinpin-Mall of Asia in Luzon, as well as in Iloilo-Guimaras, Tubigon-Cebu and San Carlos-Cebu in Visayas. In Mindanao, the program is eyed in Davao-Samal, Cagayan de Oro-Cebu, Zamboanga-Isabela and Zamboanga-Jolo.

The PPA said the PPP would cost just P2 million a day, which means the budget can last for 100 days. This is far from MARINA’s proposal that could deplete the funds in only three days.

However, the PPP will benefit less than half of what the MARINA proposal could, as it will give out subsidies to only 51,878 passengers a day.

The subsidies will vary based on distance: P3 to P6 for short-haul routes, P50 to P80 for medium routes and as much as P500 for long-haul routes.

The PPA had asked the DOTr to choose its proposal over MARINA’s for sustainability, saying if free rides must really be given, this should be done only on a few isolated routes.

“This program ensures that rising fuel costs do not fully translate into higher fares, while keeping government support targeted, sustainable and accountable. Fuel is a major component of vessels’ operating cost,” the PPA document said.

As announced last week, the DOTr is tapping into its P1-billion allocation for SCP, allowing it to enter into contracting arrangements with transport providers to partly subsidize expenses. Under this, the DOTr will pay transport operators based on performance.

The DOTr is splitting the budget into two – P800 million for road transport and P200 million for maritime services – with the agency seeking a P5-billion addition to extend its lifeline.

In exchange, public utility vehicles covered by the SCP must grant a 20-percent discount to their passengers to ease the pressure of price hikes.

Acting Transportation Secretary Giovanni Lopez said he has instructed MARINA and the PPA to work on the guidelines for the SCP in the maritime sector.