LTFRB, banks urged to simplify loan process for PUV modernization

The Land Transportation Franchising and Regulatory Board (LTFRB) and state-run banks Landbank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP) should speed up the process of granting loans to public utility vehicle operators so they can modernize their units, a solon urged Monday.

Agri party-list Representative Wilbert Lee made the call in House Resolution 1474, saying that the LTFRB, as an attached agency of the Department of Transportation (DOTr), must simplify requirements being asked from applicant franchise owners, transport cooperatives and corporations so that they can obtain loans to comply with the government's PUV modernization mandate.

Lee’s call also coincided with Day 1 of the three-day transport strike led by transport group PISTON in protest of the looming December 31 deadline for operators to enlist in the PUV modernization program by applying as a consolidated entity to secure a franchise, or eventually lose their franchise to operate.

"The loan grant process should be short and speedy so the affected sectors would be enticed to join the PUV modernization. A lot of PUV drivers and operators fear that they will lose their livelihood because of the program, and this fear is understandable given that majority of jeepney drivers and operators do not have the capital to buy the modern jeepneys,” Lee said.

“This is why they need easier access to loans. If they are swamped with requirements from the get, they will really have a hard time at it. We should help them and not make things difficult for them,” Lee added.

LandBank and the DBP each has a special loan program which provides access to operators and drivers to adequate funding for the PUV modernization program: the SPEED PUV Loan Program for LandBank and the Program Assistance to Support Alternative Driving Approaches (PASADA Financing Program) for DBP.

“With strong emphasis on finding areas for improvement and cutting out pointless processes and unnecessary requirements, LandBank and DBP are strongly urged to work with pertinent government agencies, trade associations, and stakeholders to gather inputs and feedback on its loan application procedures,” Lee said.

The PUV modernization program, which dates back 2017, aims to replace jeepneys with vehicles that have at least a Euro 4-compliant engine to lessen pollution and replace PUVs that are not road worthy by Land Transportation Office standards. 

Each unit, however, would cost over P2 million, an amount that even the LandBank and DBP said is too expensive for PUV drivers and operators.

'Forced consolidation'

Given such a price, House Assistant Minority Leader Arlene Brosas of Gabriela party-list said PUV modernization will phase out livelihoods phaseout and, as such, is anti-poor.

"The forced consolidation seems to be the government's bogus modernization program and the corporate takeover of PUV routes, as only big business owners have the financial capacity to purchase the required 15 mini buses to operate a route without being burdened by heavy debts," Brosas said.

"By setting a deadline for the Franchise Consolidation despite massive protests from drivers and operators, the government is forcing the people to surrender their individual franchise rights. If they cannot afford the exorbitant costs of modernization, they will automatically lose their livelihood, which will then be owned by cooperatives or corporations," she added.

Likewise, Brosas said that the government's equity subsidy for loans of P160,000 is not enough to alleviate the financial burden on the operators, who would still have to take on millions in debt to make the upgrade.

"Traditional models, more financially accessible at around P150,000 to P250,000, stand in stark contrast to modern jeepneys priced at over P2 million. This vast cost disparity places an overwhelming financial strain on drivers, especially considering their average daily earnings of just P2,000," Brosas said.

"The weight of this unfair burden disproportionately impacts already marginalized and vulnerable drivers and operators. The government is way out of its head thinking that jeepney drivers are millionaires. We demand a fair and inclusive transition that takes into account the welfare and livelihoods of the poor and marginalized," she added. — BM, GMA Integrated News