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

Twentieth Congress
First Regular Session

HOUSE BILLNO. 4474

Introduced by Representative RAYMOND ADRIAN SALCEDA

AN ACT
ESTABLISHING THE JUST TRANSITION FRAMEWORK TO PUBLIC UTILITY
VEHICLE MODERNIZATION, PROVIDING SAFEGUARDS FOR DRIVERS,
OPERATORS, AND COMMUNITIES, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Public utility vehicle (PUV) modernization is a central element of the country’s
transport and climate agenda. The program envisions the replacement of traditional jeepneys
and other outdated units with cleaner, safer, and more efficient vehicles, thereby reducing air
pollution, greenhouse gas emissions, and road accidents while improving commuter
experience.

However, the transition has not been without challenges. Thousands of small operators
and drivers, many of whom depend solely on daily jeepney income for their livelihood, have
expressed difficulty in complying with modemization requirements due to the high upfront
costs of new vehicles, limited access to concessional financing, and organizational hurdles in
forming cooperatives. Without adequate support, modernization risks displacing workers,
burdening commuters with higher fares, and creating social unrest.

The International Labour Organization (ILO) and global climate agreements emphasize
the principle of a just transition—a shift to sustainable systems that protects workers,
communities, and vulnerable groups, while ensuring fairness in the distribution of costs and
benefits. Applying this principle to PUV modernization means not just replacing vehicles, but
also creating mechanisms to preserve livelihoods, provide financial and institutional support to
small operators, and guarantee affordable transport for commuters.

‘This proposed measure, the Just Transition for PUV Modernization Act, establishes a
legal framework to integrate social safeguards into the modernization program. It creates a
dedicated Transition Financing Facility within government financial institutions such as the
Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LBP) to extend


concessional loans, lease-to-own options, and credit guarantees to small operators and
cooperatives. It provides income support, retraining, and alternative livelihood programs for
displaced drivers, and mandates the Technical Education and Skills Development Authority
(TESDA) to develop specialized training on modern vehicle maintenance and green transport
practices.

The bill also creates a Just Transition Council under the Department of Transportation
(DOT®), composed of government agencies, drivers’ and operators’ associations, commuter
groups, and civil society representatives, to ensure continuous dialogue, transparency, and
accountability in implementation. Fare-setting mechanisms will remain transparent and
equitable to safeguard commuters against undue increases.

By adopting this measure, the country will be able to advance its environmental and
transport objectives without leaving behind the very workers and communities that sustain the
transport sector. It transforms PUV modernization from a purely technological shift into a
socially just and economically inclusive reform.

In view of the foregoing, the immediate passage of this bill is eamestly sought.



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

Twentieth Congress
First Regular Session

HOUSE BILL NO. 4474

Introduced by Representative RAYMOND ADRIAN SALCEDA

AN ACT
ESTABLISHING THE JUST TRANSITION FRAMEWORK TO PUBLIC UTILITY
VEHICLE MODERNIZATION, PROVIDING SAFEGUARDS FOR DRIVERS,
OPERATORS, AND COMMUNITIES, 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 Transition for PUV
Modernization Act.”

SEC. 2. Declaration of Policy, It is hereby declared the policy of the State to pursue
public utility vehicle modernization in line with sustainable transport, energy efficiency, and
climate resilience goals, while ensuring that drivers, operators, and affected communities
undergo a just transition that protects livelihoods, secures access to affordable transport, and
distributes the costs and benefits of modernization fairly.

SEC. 3. Just Transition Framework. A Just Transition Framework for PUV
modernization is hereby established to guide government policy and program implementation.

The framework shall be anchored on the following principles:

(a) protection of workers’ rights and incomes;

(b) affordability of transport for commuters;

(0) financial and institutional support for small operators and cooperatives;

(4) environmental sustainability; and (¢) social dialogue with stakeholders.

SEC. 4. Transition Assistance for Drivers and Operators. The Department of
Transportation (DOTs), in coordination with the Land Transportation Franchising and

Regulatory Board (LTFRB) and the Department of Labor and Employment (DOLE), shall
establish programs for:


(a) income support for displaced drivers during transition;

(b) subsidized or concessional financing for operators to acquire compliant vehicles;
(©) cooperative formation and strengthening for small operators; and

(d) access to skills retraining and alternative livelihood programs.

SEC. 5. Transition Financing Facility, Government Financial Institutions (GFls),
particularly the Development Bank of the Philippines (DBP) and Land Bank of the Philippines
(LBP), shall establish a dedicated Transition Financing Facility for PUV modernization. This
facility shall provide long-term, low-interest loans, credit guarantees, and lease-to-own
schemes for cooperatives and small operators. The Bangko Sentral ng Pilipinas (BSP) shall
classify such financing as part of sustainable finance to encourage private sector participation.

SEC. 6. Commuter Safeguards. The LTFRB, in coordination with the National
Economic and Development Authority (NEDA) and the Department of Energy (DOE), shall
ensure that fare-setting mechanisms under modernization programs remain affordable and
equitable. Fare adjustments shall be subject to transparent consultations with commuter groups.

SEC. 7. Social Dialogue. A Just Transition Council is hereby created under the DOT?,
composed of representatives from government agencies, transport cooperatives, drivers’ and
operators’ associations, commuter groups, and civil society. The Council shall advise on
transition policies, monitor implementation, and recommend adjustments.

SEC. 8 Capacity-Building Programs. The Technical Education and Skills
Development Authority (TESDA) shall develop certification and training programs for drivers
and operators on modem vehicle maintenance, green driving practices, and altemative
livelihood options.

SEC. 9. Funding. The initial amount necessary to carry out the provisions of this Act
shall be included in the annual General Appropriations Act. Additional funding may be sourced
from the Motor Vehicle User’s Charge (MVUC) special funds and other climate finance
facilities.

SEC. 10. Implementing Rules and Regulations. Within ninety (90) days from the
effectivity of this Act, the DOTr, in consultation with DOLE, LTFRB, DBP, LBP, BSP,
TESDA, and relevant stakeholders, shall promulgate the necessary rules and regulations.

SEC. 11. Separability Clause. If any provision of this Act is declared unconstitutional,
the remainder shall not be affected thereby.

SEC. 12. Repealing Clause. All laws, decrees, executive orders, and regulations
inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 13. Effectivity. This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,