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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

House Bill No. 2415.

Introduced by Representative FELIMON M. ESPARES

AN ACT
INSTITUTIONALIZING THE PUBLIC TRANSPORT
MODERNIZATION PROGRAM (PTMP), APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Public Transportation plays a vital role in providing a safe, efficient, and
environment-friendly transport services for countless Filipino citizens. A modern and
efficient public transportation sector is fundamental in offering the public a dignified
daily commute.

To this end, the government, through the Department of Transportation
(DOTr), launched its flagship non-infrastructure program under DOTr Department
Order No. 2017-011—formerly known as the Public Utility Vehicle Modernization
Program (PUVMP)— now referred to as the Public Transport Modernization Program
(PTMP). This initiative seeks to establish a safe, dependable, convenient, and
commuter-centered public transport system that benefits both commuters and
industry stakeholders.

While a significant portion of the transport sector has expressed strong
willingness to comply with the government's modernization agenda, they are often
unable to do so due to the prohibitive costs of upgrading fleets and operations.
Although loan windows exist through government financial institutions such as the
Land Bank of the Philippines and the Development Bank of the Philippines, many
transport cooperatives have yet to access sufficient financing that meets the full cost
of modernization required by the DOTr.

To make matters more urgent, the budget allocation for modernization remains
limited. Under the 2025 General Appropriations Act, only P1.6 billion has been
earmarked for the PTMP, and 2.5 billion for fuel subsidies across all modes of public


transportation nationwide. These amounts are grossly inadequate given the scale of
modernization needed and the number of affected operators and cooperatives.!

This proposed measure, therefore, seeks to promote a just, inclusive, and
humane modernization program—one that ensures the viability and competitiveness
of the public transportation sector while supporting its transition toward a more
sustainable and efficient transport ecosystem. By enhancing support mechanisms,
especially in financing, technical assistance, and institutional coordination, this bill
aspires to realize a modernization program that works with and for the people.

In view of the foregoing, the early passage of this bill is earnestly sought.

HON. FELIMON M. ESPARES

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

House Bill No. 2415

Introduced by Representative FELIMON M. ESPARES

AN ACT
INSTITUTIONALIZING THE PUBLIC TRANSPORT
MODERNIZATION PROGRAM (PTMP), APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

Section 1. Short Title. — This Act shall be known as the “Just and Humane Public
Utility Vehicles Modernization Act.”

Sec. 2. Declaration of Policy. — It is hereby declared the policy of the State, in
accordance with the Constitution, that the right to travel shall not be impaired, be it
due to lack of means, access, or capability to pay of the general public. Public
transportation and mobility, therefore, is a sector that should be developed,
modernized, and sustained by the State based on principles of justice, equity, and
ecological sustainability.

At the same time, the State acknowledges the public transportation sector as
both a public service and an enterprise. As an enterprise employing labor, deemed by
law as the primary social economic force, the State must protect the rights of workers
within the transportation service industry and promote their welfare. Towards this
end, the State shall encourage the creation of a people-centered strategy that
represents the core of economic and social development. It therefore ensures that the
transportation sector develops and modernizes not just technologically, but also in
accordance with principles of justice and equity, promoting full, productive

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employment and decent work for all.

The government and all its branches, subdivisions, instrumentalities, and
agencies shall ensure the provision of technical guidance, financial assistance and
other incentives to the public transportation sector, especially the transportation
cooperative sector, as partners of the government in building a sustainable nation.

Sec. 3. Objectives, - This Act shall have the following objectives:

a) To make public land transportation safer, more comfortable, and
environmentally sustainable for the riding public through the modernization of
Public Utility Vehicles (PUVs) while ensuring that the security of tenure of long-
standing drivers in the PUV industry will be protected and that their right to
work until retirement will not be compromised;

b) To provide a means of support to drivers, operators, and other transport service
workers who can no longer take part in the PUV sector due to various reasons,
including those who choose to pursue work in a different sector and thus
require retraining and reskilling;

) To revive the local manufacturing car industry by promoting the local assembly
of modernized jeepneys, thereby creating more job opportunities; and

d

To guarantee genuine and fair competition, and a level playing field within the
PUV sector.

Sec. 4. PUV Modernization Program (PUVMP). - A PUV Modernization Program,
herein referred to as “the Program” is hereby established in order to enhance the
safety, efficiency and sustainability of public ground transportation. The Department.
of Transportation (DOTr), in consultation with other concerned agencies and
stakeholders, especially Transport Service Entities (TSEs), shall develop and
promulgate guidelines and policies for the phased transition from the current PUVs to
standards-compliant vehicles. The DOTr shail also provide for consultation and policy-
making spaces through which stakeholders in the process can provide
recommendations and reform options to DOTr and other relevant government
agencies.


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Sec. 5. Engine and Body Replacement Specification. —

a) PUVs must comply with the specifications listed in the Philippine National
Standards, including, among others, specifications about height, width, and
entry;

PUVs tested and proven to be road-worthy by the DOTr and Department of
Trade and Industry's Bureau of Philippine Standards (DTI-BPS) shall only be
required to have engines replaced to be Euro 4 compliant;

The remaining budget under DTI’s Comprehensive Automotive Resurgence

b)

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Strategy (CARS) program shall be used to incentivize and support the creation
and assembly of locally manufactured PUV units and parts;

d) Only emission testing centers duly authorized by the DTI, and Resources

(DENR) and DOTr shall be used in registering PUVs in regular emission testing;
and

e) DOTr shall plan for a phased implementation of the program following a five
(5) year transition period.

Sec. 6. Financial Assistance. —

a) Government Subsidy - Government financial assistance provided to TSEs who
elect to modernize shall not be lower than twenty percent (20%) of the
suggested retail price per unit to lighten the capital burden of modernization.
Moreover, the DOTr shall work with public and private financial institutions,
such as cooperative banks and other financial services cooperatives, among
others, to provide equitable financing for the modernized vehicles;

b) Public Transportation Loan Fund:

1. The Public Transportation Loan Fund (“Fund”) is hereby established
as the principal source of financial assistance to the public
transportation sector for the pursuit of various economic activities
necessary in attaining the primary objective of the implementing the
PUVMP, including extending support to public transport workers.

2. The Fund shall be used in fleet modernization or vehicle/vessel
acquisition program that conforms to land and sea safety standards,

environmental protection laws and rules, and other relevant laws,
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rules and regulations, and issuances.

3. The loanable amount shall be equal to eighty percent (80%) of the
suggested retail price of a modernized vehicle.

4. Only TSEs who have been issued a Notice of Selection by the
DOTr/LTFRB shall be qualified beneficiaries of the Fund.

5. The Landbank of the Philippines (“LBP”) and the Development Bank
of the Philippines (“DBP”) shall jointly administer the Fund, and
approve applications for loans, upon favorable recommendation of the
DOTr, and following simplified rules and requirements to be
established pursuant to Sec. 6(c) below.

6. An annual report to the House of Representatives, through the
Committee of Transportation, detailing its administration and
implementation of the Fund, shall be submitted; and

c) Loan Interest/Payment Options:

1. A tripartite mechanism involving government, financing institutions,
and TSEs shall be established to set policies for the Fund and other
issues on implementation. Recognizing that the Fund is established to
empower TSEs and accelerate the modernization of the country’s
public transportation system, loan requirements shall be simplified
and tailored to the current situation and standing of TSEs, and no
additional or burdensome requirements may be imposed regarding
the release of such loans.

2. The interest rate on loan amortization shall not exceed four percent
(4%) diminishing annual interest considering the public service nature
of PUV services.

3. The loan amortization period shall be at least ten (10) years, with the
option for pre-termination on the part of the TSE; Provided, that the
loan shall be subject to re-computation if a TSE decides to pre-
terminate; Provided, further, that the total cost of the monthly
amortization shall be proportional to the monthly revenue of a PUV
driver or operator.


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Sec. 7. Assistance to TSEs Who Have Commenced Modernization. — ATSE which
has already availed of subsidies and loans pursuant to the existing PUVMP under the
DOTr shall be qualified to avail of the subsidy and better terms under this Act;
Provided, that the tripartite mechanism established under Sec. 6(c)(1) above shall also
issue the rules and guidelines to implement this provision.

Sec. 8. Compensation Option. — Drivers who can no longer take part in the PUV
sector due to the Program shall be given a reasonable amount of financial assistance,
in coordination with the relevant Local Government Units (LGUs), to enable them to
venture into other forms of livelihood. In addition, The DOTr, together with Technical
Education and Skills Development Authority (TESDA) and Department of Labor and
Employment (DOLE), shall create a joint task force in order to create and implement
programs for the effective transition of former drivers to other forms of livelihood.

Sec. 9. PUV Sector Competitiveness Enhancement. — To prevent unwanted
competition between drivers and operators planning on operating in the same area, a
“first usage"/"first presence” policy shall be implemented. Long term
existing/residential operators/drivers within a particular area shall be given priority in
route assignment; Provided, that the foregoing shall be conditioned upon concrete
plans to modernize the operator's fleet; Provided, further, that the DOTr, in the
issuance shall, in the issuance of authorities to operate, shall take into consideration
circumstances wherein it is impractical or not feasible for one (1) TSE to service one
(1) route. In any event, the modernization of the PUV fleet shall be the topmost
consideration in granting route assignments.

Sec. 10. Route Rationalization and Fleet Management. - The DOTr shall
prioritize the creation and implementation of an efficient fleet management system
and route rationalization plans throughout the country. It shall also extend aid to TSEs
that will be affected by route rationalization.

Sec. 11. Removal of Authority to Operate. — Once the route rationalization and
fleet management plans have been approved and are operational, any operator that

shall not update and modernize at least fifty percent (50%) of the number of
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authorized units included in the Notice of Selection issued by the LTFRB, and in
accordance with other relevant issuances and directives, within five (5) years from the
effectivity of this Act shall have its authority to operate be revoked.

Sec. 12. Penal Provisions. - Any person who, by fault, negligence or omission,
causes, either directly or indirectly, the failure to issue the LPTRP shall be held liable,
and the following penalties shall be imposed:

a) First Offense: Administrative liability of not more than six (6) months
suspension, with a fine of not less than Twenty Thousand Pesos (Php
20,000.00) to Two Hundred Thousand Pesos (Php 200,000.00): Provided,
however, that in the case of fixing and/or collusion, the penalty and liability
under Sec. 12(b) of this Act shall apply.

b) Second Offense: Administrative liability and criminal liability of dismissal from
service, perpetual disqualification from holding public office and forfeiture of
retirement benefits, and imprisonment of one (1) year to six (6) years with a
fine of not less than Five Hundred Thousand Pesos (Php 500,000.00), but not
more than Two Million Pesos (Php 2,000,000.00).

The foregoing shall not be a bar to the institution of criminal actions pursuant to
other applicable laws, including but not limited to Article 210 of the Revised Penal
Code, such as through the commission of bribery, extortion, or when the violation was
done deliberately and maliciously to solicit favor in cash or in kind. In such cases, the
pertinent provisions of the Revised Penal Code and the relevat special laws shall apply.

Sec. 13. Appropriations. - The equivalent of twenty percent (20%) annual share
of the total gross collections of the Motor Vehicle User's Charge (MVUC) collected
pursuant to Republic Act No. 8794, as amended, shall be utilized to fund this Act. The
amount shall be indicated as a separate line item under the budget of the DOTr in the
annual General Appropriations Act (GAA).

The MVUC shalll also be the principal source of the Fund, as established under
Sec. 6(b) of this Act, in the amount of Fifty Billion Pesos (Php 50,000,000,000.00)..


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Sec. 14. Implementing Rules and Regulations, — The Secretary of
Transportation, in consultation with other relevant government agencies and transport
sector groups and cooperatives, shall issue the rules and regulations necessary for the
effective implementation of this Act within sixty (60) days of its effectivity.

Sec. 15. Annual Reports. — The agencies involved in the PUVMP, headed by the
DOTr, shall submit an annual report to the Congress of the Philippines on the progress
of the PUVMP, and offer recommendations for possible legislation.

Sec. 16. Joint Congressional Oversight Committee. — There is hereby created a
Joint Congressional Oversight Committee (JCOC) composed of seven (7) members
from the Senate and House of Representatives, respectively, which shall be co-chaired
by the Senate Committee on Public Services and House Committee on Transportation.
Within five (5) years after the effectivity of this Act, or as the need arises, the House
JCOC shall conduct a sunset review. For purposes of this Act, the term “sunset review”
shall mean a systematic evaluation of the accomplishments and impact of this Act, as
well as the performance and organizational structure of its implementing entities, for
purposes of determining remedial legislation.

Sec. 17. Separability Clause. — If for any reason, any part or provision of this
Act is declared invalid, unlawful, unenforceable, or unconstitutional, the remaining
parts or provisions not affected thereby shall remain in full force and effect.

Sec. 18. Repealing Clause. — All laws, executive orders, presidential decrees,
rules and regulations or parts thereof contrary to or inconsistent with any provisions
of this Act are hereby repealed, amended or modified accordingly.

Sec. 19. Fffectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in two (2) national newspapers of general

circulation.

Approved,