Republic of the Philippines
House of Representatives
Quezon City
NINETEENTH CONGRESS
Second Regular Session
`''HOUSEB|LLNo.9061
Introduced by Hon.  Felimon M.  Espares
COOP-NATCCO PARTYLIST
AN ACT
INSTITUTIONALIZING THE PUBLIC UTILITY VEHICLE
MODERNIZATION PROGRAM (PUVMP), 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  biggest  non-infrastructure  program  under  DOTr  Department
Order  No.  2017-011,  otherwise  known  as  the  Public  Utility  Vehicle  Modernization
Program (PUVMP), which aimed to provide commuters and other stakeholders a safe,
convenient,    reliable,    dependable,   and   commuter-focused    public   transportation
system. On the other hand, enacting the PUVMP should not unduly burden our drivers
and operators, who are the backbone of the industry,
Further, while most of the public transportation sector are very much willing to
comply with the modernization efforts of the government, they are unable to do so
because of the exorbitant costs needed to update their fleets and operations. Thus, it
is also imperative for the government to provide much-needed financial assistance in
order for the PUVMP to move forward.
As  such,  this  measure  hopes  to  present  a  just  and  humane  modernization
program  that  will  enable  the  sector  to  strengthen  its  competitiveness,  ensure  its
viability, and effectively transition to a more modern and efficient system.
In view of the foregoing, the early passage of this bill is earnestly sought.


Republic of the Philippines
House of Representatives
Quezon City
NINETEENTh CONGRESS
Second Regular Session
rfeusE BILLNO.    9061
Introduced by Hon.  Felimon M.  Espares
Coop-NATCCo PARrvLIST
AN ACT
INSTITUTIONALIZING THE PUBLIC UTILITY VEHICLE
MODERNIZATION PROGRAM (PUVMP), APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES
Pf  it  enacted  by .th_e  Senate  and  House  of  Representatives  of the  Philippines  in
Congress assembled :
9                Section 1. Storf 77i#g, -This Act shall be known as the ``Just and Humane public
10       Utility vehicles Modernization Act."
11
12                See. 2. Oec]/araz7oy7 ofpo/#'cy. -It is hereby declared the policy of the State, in
13      accordance with the Constitution, that the right to travel shall not be impaired,  be it
14      due  to  lack  of  means,  access,  or  capability  to  pay  of  the  general  public.  Public
15      transportation   and   mobility,   therefore,   is   a   sector   that   should   be   developed,
16      modernized,  and  sustained  by the  State  based  on  principles of justice,  equity,  and
17       ecological sustainability.
18
19                At the same time, the State acknowledges the  public transportation  sector as
2o      both a public service and an enterprise. As an enterprise employing labor, deemed by
21      law as the primary social economic force, the state must protect the rights of workers
22      within  the  transportation  service  industry  and  promote  their welfare.  Towards  this
23      end,  the  State  shall  encourage  the  creation  of  a  people-centered  strategy  that
24      represents the core of economic and social development. It therefore ensures that the
25      transportation  sector develops and  modernizes  not just technologically,  but also  in
26      accordance   with    principles   of   justice   and   equity,    promoting    full,    productive
27      employment and decent work for all.
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28
29                The   government   and   all   its   branches,   subdivisions,   instrumentalities,   and
3o      agencies  shall  ensure  the  provision  of technical  guidance,  financial  assistance  and
31       other  incentives  to  the  public  transportation  sector,  especially  the  transportation
32      cooperative sector, as partners of the government in building a sustainable nation.
33
34                See. 3[  04/Gct7-Mrs. -This Act shall have the following objectives:
35            a)  To    make    public    land    transportation    safer,     more    comfortable,     and
36                   environmentally sustainable for the riding public through the modernization of
37                   Public utility vehicles (PUVs) while ensuring that the security of tenure of long-
38                   standing  drivers  in  the  PUV industry will  be  protected  and  that their right to
39                   work until retirement will not be compromised;
40            b)  To provide a means of support to drivers, operators, and other transport service
41                   workers who can no longer take part in the puv sector due to various reasons,
42                   including  those  who  choose  to  pursue  work  in  a  different  sector  and  thus
43                    require retraining and  reskilling;
44             c)  To revive the local manufacturing car industry by promoting the local assembly
45                   of modernized jeepneys, thereby creating more job opportunities; and
46             d)  To guarantee genuine and fair competition, and a level playing field within the
47                   PUv sector.
48
ays                 SR!c;. 4. PUV Modernization program (PUVMP). -APuN NloderrfuHaidiid+I in prvylim,
50      herein  referred  to  as `the  Program" is  hereby established  in  order to enhance the
51       safety,  efficiency and.sustainability of public ground transportation. The Department
52      of  Transportation   (DOTr),   in   consultation   with   other   concerned   agencies   and
53      stakeholders,   especially   Transport   Service   Entities   (TSEs),   shall   develop   and
54      promulgate guidelines and policies for the phased transition from the current puvs to
55       standards-compliant vehicles. The DOTr shall also provide for consultation and poliey-
56      making    spaces    through    which    stakeholders    in    the    process    can     provide
57      recommendations  and   reform   options  to   DOTr  and   other  relevant  government
58       agencies.
59
cO               Sac. 5. Engine and Body Replacement specification. -
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a)   PUVs  must  comply  with  the  specifications  listed  in  the  Philippine  National
Standards,  including,  among  others,  specifications  about  height,  width,  and
entry;
b)  PUVs tested and  proven  to  be  road-worthy  by the  DOTr and  Department of
Trade  and  Industry's  Bureau  of Philippine  Standards (Dll-BPS)  shall  only be
required to have engines replaced to be Euro 4 compliant;
c)  The  remaining  budget  under  Dll's  Comprehensive  Automotive  Resurgence
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  Dll,  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.
Sfer:. 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  f`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,
rules and regulations, and issuances.
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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 C`LBP') and the  Development Bank
of  the   Philippines  C`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;  a„d
c)   Loan Interesvpayment 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  modemization  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 rsE;  Pyiov#'Jad, that the
loan  shall  be  subject  to  re-computation  if  a  TSE  decides  to  pre-
terminate;   Prioi+i.dad,   rfurdter,  that  the  total  cost  of  the  monthly
amortization  shall  be  proportional to the  monthly  revenue of a  PUV
driver or operator.
5fig£.i . Assistance to rsEs Who Have Commenced Modernization. -ATsfi:which
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127      has already availed of subsidies and loans pursuant to the existing puvMP under the
128       DOTr  shall  be  qualified  to  avail  of the  subsidy  and  better  terms  under  this  Act;
129      PyioMvi.dew, that the tripartite mechanism established under sec. 6(c)(1) above shall also
130      issue the rules and guidelines to implement this provision,
131
132                See. 8.  Com;pevrsaf/om @tr.o#. -Drivers who can no longer take part in the puv
133      sector due to the program shall be given a reasonable amount offinancial assistance,
134      in coordination with the relevant Local Government units (LGUs), to enable them to
135      venture into other forms of livelihood. In addition, The DOTr, together with Technical
136      Education  and  Skills Development Authority (lESDA)  and  Department of Labor and
137      Employment (DOLE), shall create a joint task force in order to create and implement
138      programs for the effective transition of former drivers to other forms of livelihood.
139
140               S®c, 9.  PUV  Sector  Competitiveness  Enhancement.  -To  preverit urNIamerd
141      competition between drivers and operators planning on operating in the same area, a
142      "first     usage''/"first     presence"     poliey     shall     be     implemented.     Long     term
143       existing/residential operators/drivers within a particular area shall  be given priority in
144      route assignment;  P7iori.dad,  that the foregoing  shall  be conditioned  upon  concrete
145      plans  to  modernize  the  operator's  fleet;  fyioirid8d,  /I+rd4er,  that  the  DOTr,  in  the
146      issuance  shall, in the issuance of authorities to operate, shall take into consideration
147      circumstances wherein  it is impractical or not feasible for one (1) TSE to service one
148      (1)  route.  In  any  event,  the  modernization  of the  PUV  fleet  shall  be  the  topmost
149      consideration in granting route assignments,
150
151               Set;.  Ilo.   Route  Rationalization  and  Fleet  Management.  - The  D0rrr  shaiNA
152      prioritize the  creation  and  implementation  of an  efficient fleet management system
153      and route rationalization plans throughout the country. It shall also extend aid to TSEs
154      that will be affected by route rationalization.
155
156               See.11. Aemora/ ofAutho"fy to operate. -Once the route rationalization and
157      fleet management plans have been approved and are operational, any operator that
158      shall  not  update  and  modernize  at  least  fifty  percent  (50%)  of  the  number  of
159       authorized  units  included  in  the  Notice  of  Selection  issued  by  the  LTFRB,  and  in
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16o      accordance with other relevant issuances and directives, within five (5) years from the
161      effectivity of this Act shall have its authority to operate be revoked.
162
163                Sec.12. fg#a/Pyiowzi/o#s. -Any person who, by fault, negligence or omission,
164      causes, either directly or indirectly, the failure to issue the LPTRP shall be held liable,
165       and the following penalties shall be imposed:
166             a)   First   Offense:   Administrative   liability   of   not   more   than   six   (6)   months
167                   suspension,   with   a   fine   of  not   less  than   Twenty  Thousand   Pesos   (Php
168                   20,000.00)  to  Two  Hundred  Thousand   Pesos  (Php  200,000.00):   PyiovH.ded,
169                   Ao"eMer, that  in  the case of fixing  and/or collusion,  the  penalty and  liabilfty
170                    under sec.12(b) of this Act shall apply.
171              b)   Second  offense:  Administrative  liability and  criminal  liability of dismissal  from
172                    service,  perpetual  disqualification  from  holding  public  office  and  forfeiture  of
173                   retirement benefits, and  imprisonment of one (1) year to six (6) years with a
174                   fine of not less than Five Hundred Thousand pesos (Php 500,000.00),  but not
175                    more than Two Million pesos (Php 2,000,000.00).
176
177                The foregoing shall not be a bar to the institution of criminal actions pursuant to
178       other  applicable  laws,  including  but  not  limited  to  Article  210  of the  Revised  Penal
179      Code, such as through the commission of bribery, extortion, or when the violation was
180       done deliberately and maliciously to solicit favor in cash or in kind. In such cases, the
181       pertinent provisions of the Revised penal code and the relevat special laws shall apply,
182
183                Sec.13. ,4ppnaprmb#ars. -The equivalent of twenty percent (20%) annual share
184      of the  total  gross  collections  of the  Motor Vehicle  Users  Charge  (MVUC)  collected
185       pursuant to Republic Act No. 8794, as amended, shall be utilized to fund this Act. The
186      amount shall be indicated as a separate line item underthe budget of the DOTr in the
187       annual General Appropriations Act (GAA).
188
189                 The  MVUc shall  also  be the  principal source of the Fund,  as established  under
190       Sec. 6(b) of this Act, in the amount of Fifty Billion pesos (Php 50,000,000,000.00).
191
192                Sfgc.    LA,.    Implementing    Rules    and    Regulations.    -   The   Sye!c:re!rdry    Of
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193      Transportation, in consultation with other relevant government agencies and transport
194      sector groups and cooperatives, shall issue the rules and regulations necessary for the
195      effective implementation of this Act within sixty (60) days of its eifectivity.
196
197               Sec.15. Am#a/Acipots. -The agencies involved in the puvMP, headed by the
198      DOTr, shall submit an annual report to the congress of the philippines on the progress
199      of the puvMP, and offer recommendations for possible legislation.
200
2"              See. u6. Joint congressional oversight committee. -Therre.rs he!re!rty ereeit!ch a
202      Joint  Congressional  Oversight Committee  (JCOC)  composed  of seven  (7)  members
203      from the senate and House of Representatives, respectively, which shall be co-chaired
204      by the senate committee on public services and House committee on Transportation.
2o5      Within five (5) years after the effectivity of this Act, or as the need arises, the House
206      JCOc shall conduct a sunset review. For purposes of this Act, the term ``sunset review"
207      shall mean a systematic evaluation of the accomplishments and impact of this Act, as
208      well as the performance and organizational structure of its implementing entities, for
209       purposes of determining remedial legislation.
210
211                See.17.  5Epara4x./xfy c}/a«5e, -If for any reason, any part or provision of this
212      Act  is  declared  invalid,  unlawful,  unenforceable,  or  unconstitutional,  the  remaining
213       parts or provisions not affected thereby shall remain in full force and effect.
214
215                See.18.  Aepea/x.ng Cya«5g, -All  laws,  executive orders,  presidential  decrees,
216      rules and regulations or parts thereof contrary to or inconsistent with any provisions
217      of this Act are hereby repealed, amended or modified accordingly.
218
219                See.  19.  £ifecf7.rtry.  -  This  Act  shall  take  effect  fifteen  (15)  days  after  its
220       publication   in  the  Official  Gazette  or  in  two  (2)  national  newspapers  of  general
221        circulation.
222
2:23                 Ap p roved ,
8