The continuing perils of the PUV modernization program

Atty. Jeremiah Belgica

SINCE 2017, we have been expecting the full implementation of the government’s PUV modernization program.

The Department of Transportation (DoTr) issued Department Order 2017-011, or the “Omnibus Guidelines on the Planning and Identification of Public Road Transportation Services and Franchise Issuance” or “Omnibus Franchising Guidelines” (OFG), which aims to provide a reliable, safe, accessible, environment-friendly, dependable, efficient and comfortable public transportation. This also signaled the push for the whole PUV industry to slowly phase out all the old and rugged units and replace them with new and modernized vehicles.

However, the program has now infamously seen so many dramatic turns and hiccups as the full implementation and modernization of all PUVs is nowhere near completion. This is due to several reasons, and let me tell a few.

First is the source of funding for the cooperatives that bureaucratic requirements have held back. The government has already set aside billions of pesos through government banks like the Development Bank of the Philippines and the Land Bank of the Philippines. However, one of the requirements that the banks ask for is the local public transportation route plan (LPTRP) from the local government.

Formulated by LGUs, the LPTRP details route networks, modes and the required number of units per mode to deliver public land transport services. It is a key component of the Public Utility Vehicle Modernization Program (PUVMP). In a column I wrote in 2022, I explained that, according to the Department of the Interior and Local Government (DILG) and the DoTr’s Joint Memorandum Circular 001, Series of 2017, the LGUs must submit their LPTRPs to the Land Transportation Franchising and Regulatory Board (LTFRB) six months after receiving a notice from the DoTr to begin the LPTRP preparation period. This will come after they undergo training and/or capacity-building activities. This means that all the LGUs should have filed their LPTRPs in 2019. Unfortunately for our transport cooperatives nationwide, there are still many LGUs that have not submitted and completed their LPTRP, and surprisingly, a number of them are from the National Capital Region.

This means that the transport cooperatives are left high and dry because the government financial institutions would not approve their loan applications without the LPTRP, thus preventing them from purchasing modernized units, which is necessary for the issuance of the franchise by LTFRB. The Marcos administration has tried to remedy this problem by allowing the LTFRB to issue an “alternative certificate” in favor of an applicant cooperative to the banks, which should already assure the banks and prod them into processing the loan applications even without the LPTRP by the local government. However, a number of applications for this alternative certificate have remained pending with the LTFRB for months. These are things that may already be acted upon immediately to address many of the current backlogs.

Second is the resistance of progressive organizations to submit to this modernization program. They oppose the phase-out of their old units and argue that joining a cooperative and buying a new vehicle necessitates incurring debt by operators and drivers who are already financially hard up. They argue that requiring them to drive within a fixed schedule, rather than the current system that allows them to work for as long as they want, is really to their disadvantage. Piston, Bayan Muna party-list and other progressive groups filed a petition before the Supreme Court asking for the suspension of the government’s PUVMP.

On the other hand, the larger portion of the transport sector seems to support the modernization program groups. In fact, they countered the petition filed by the progressive groups and opposed the same before the Supreme Court last month and urged the high court not to stop the implementation of the PUVMP. The petitioners are members of the Pasang Masda Nationwide, Inc. (Pasda Masda), Alliance of Transport Operators and Drivers Association of the Philippines (Altodap), Alliance of Concerned Transport Organizations (ACTO), and Liga ng mga Transportation at mga Operator ng Pilipinas (LTOP). These other groups contend that being part of a cooperative would work for the benefit of the drivers since they would now be able to work with social welfare benefits like SSS, PhilHealth and Pag-IBIG. Likewise, driving a modernized and upgraded PUV could uplift the morale and safety of both the public and the transport industry.

Unfortunately for those who already complied and organized themselves as transport cooperatives, the House of Representatives has opened an investigation questioning the PUVMP, apparently heeding the call of those groups opposed to the program. This, nonetheless, cuts both ways as it now imperils the welfare of those who already complied, in the event the government decides to make the modernization compulsory.

Finally, a growing challenge to the modernization program is the free public transport services being given by some LGUs, which have now directly competed and are slowly stifling the viability of these modernized vehicles. There have been reports that a number of LGUs are now providing free public transportation within their jurisdiction, resulting in a decrease in the business viability of those legally operating under an LTFRB franchise. These LGUs had implemented these “libreng sakay” programs to assist the public affected by the global pandemic. But these programs have now taken a life of their own as the LGUs decided to continue with the free public transportation subsidy even after the global pandemic. This, however, directly competes with, if not completely stifles, the operations of the newly modernized transport groups as the riding public would rather choose the free rides over them. Without them having the expected output, their payment for their loans will definitely be in danger of default.

I hope that the president and the secretaries of the DoTR, DILG and other agencies will start to look into these matters immediately, as the PUV modernization program remains in a perilous situation.