The Land Transportation Franchising and Regulatory Board (LTFRB) has assured due process for transport operators and drivers who will fail to comply with the Dec. 31- deadline for their consolidation into either a cooperative or a corporation under the government’s public utility vehicles (PUV) modernization program.

Lawyer Zona Russet Tamayo, LTFRB-National Capital Region director, said a Show Cause Order (SCO) will be issued to the non-complying operators and drivers before any action on the cancellation of their franchises will be undertaken. 

Transport groups Piston (Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide) and Manibela have been defiant on the call to consolidate as they continue to question the impact of the immediate implementation of the PUV Modernization Program.

Piston, for its part, has filed a petition before the Supreme Court, which in turn, asked the LTFRB and other government agencies to respond within 10 days after the receipt of the High Court order.

“It’s a legal procedure under the Public Service Act to issue a Show Cause,” said Tamayo in a press briefing. 

But she said cancellation of the franchise will happen if transport operators and drivers would not be able to meet the Dec. 31 deadline.

The guideline 

The consolidation of transport operators and drivers into either a cooperative or a corporation is the first phase of the PUV Modernization Program before the shift to the Route Rationalization that would start on Monday, Jan. 1.

Based on the LTFRB Memorandum Circular 2023-052 which sets the guideline of the PUVMP after the Dec. 31 deadline for consolidation, those who were able to beat the deadline will continue to have their franchise until Dec. 31, 2024, or until a certificate of public conveyance (CPC) is issued them.

The same memo stated that the CPC that would be issued to PUV drivers and operators would be valid for seven years if they are able to acquire modern units, and five years validity if they are yet to obtain modern units.

What happens to the unconsolidated?

After the Dec. 31-deadline, the LTFRB said operators and drivers will no longer be allowed to create or join a cooperative or a corporation as President Marcos, himself, stated that the deadline will stay.

The authority to operate a PUV unit is also deemed revoked for those who would fail to consolidate, meaning, they will no longer be allowed to ply their routes. 

“Further, all unconsolidated individuao operators who failed to file application for consiolidation prior to the 31 December 2023 shall no longer be allowed to organize into a juridical entity or join existing consolidated TSEs (Transport Service Entities),” the memo read.

Ray of hope 

LTFRB Board member Mercy Paras Leynes said the LTFRB action on the fate of those who will fail to consolidate would depend on the result of the consolidation report that would be known after the Dec. 31 deadline.

She explained that, for routes wherein at least 60 percent of operators and drivers were able to consolidate, the rule on the revocation of franchise would apply, and that they will no longer be allowed either to join existing group or create a new one.

But for routes with under 60 percent consolidation rate, Leynes somehow provided a ray of hope for them.

“For those which have 60 percent consolidation, they will no longer be allowed to join the cooperative or corporation in that particular route. But for other routes (under 60 percent), we did not include that in the Memorandum Circular 2023-052. Why?, Because we are waiting for the numbers by December 31,” said Leynes.

“The government listens to all the scenarios raised during consultations. We take note of that because if that eventuality happens, if the numbers will point us to thaty direction (allowing unconsolidated oprators and drivers to join existing group or consolidate, the Board will act accordingly,” she stressed.

No Transport crisis

The LTFRB officials also expressed confidence that there will be no transportation crisis after the Dec. 31 deadline for consolidation, saying majority of the operators in major routes, especially in Metro Manila have already joined the consolidation process. 

They said the routes with minimum consolidation will be covered by the consolidated operators of major routes.

In the same LTFRB memo, it allowed public utility vehicles (PUVs) that failed to consolidate into either a cooperative or corporation after the Dec. 31 deadline to operate until Jan. 31 next year in routes with less than 60 percent consolidation.

Under the memo, the LTFRB explained that the leeway granted for drivers and operators who failed to meet the deadline is aimed at ensuring that commuters would not suffer the brunt of possible shortage of public transportation, particularly jeepneys,

Around 154,000 PUV units are expected to consolidate before the end of 2023 and the figure only represents around 70 percent of the total number of public transport, which means that a number of passengers might be affected by any strict implementation of the consolidation rule.

The need to ensure sufficient number of PUVs was recognized in the LTFRB memorandum, and was cited as the reason why unconsolidated PUVs would be allowed to ply their routes until Jan. 31 next year.

“In order not to hamper the operation of public transportation routes without consolidated TSEs (Transport Service Entities), the individual operators in said routes shall be allowed to operate until 31 January 2024,” the Memorandum read.

“During this period, Show Cause Orders shall be issued by the (LTFRB) Board and its Regional Franchising Regulatory Offices to the unconsolidated individual operators in compliance with the provisions of the Public Service Act,” it added.

The Department of Transportation (DOTr) earlier said that the LTFRB was already coordinating with the local government units (LGUs) for the rationalization of routes, which is aimed at identifying routes that may be affected by the rules of PUV Modernization,

The move was aimed at ensuring that no commuters would be affected by any restriction for non-cosolidated PUV units to operate. 

In the Memorandum, the LTFRB said it may also issue special permits to operate on routes without less than 60 percent consolidation.