The Department of Transportation (DOTr) submitted to Congress for inclusion in the Stimulus Package of Government against COVID-19 a proposal for financial and socio-economic assistance to affected Public Utility Vehicle (PUV) drivers and operators who resumed operations under the General Community Quarantine (GCQ).
“Although the health and safety of the transport sector remains to be the agency’s top priority, the DOTr continuously seeks for ways to further assist all stakeholders. Our drivers, operators, transport companies and cooperatives need help so we proposed a stimulus package that includes several measures such as the provision of fuel subsidy, grace period and restructuring for existing loans to somehow ease their burden,” DOTr Secretary Arthur Tugade said.
To defray the cost of operations and mitigate the loss of income in the transport sector, the DOTr is proposing a fuel subsidy to help operators and drivers recover their projected profit and take-home income.
Transport companies and cooperatives also risk default on existing debts for the modernization of PUV units, acquiring new models, and rent of terminals, among others. To enable them to resume operations, the DOTr is proposing loan packages specific for the transport cooperative sector and all PUV operators.
Data from the Land Transportation Franchising and Regulatory Board (LTFRB) show that 534,767 workers employed in the road transport sector are burdened by the aftermath of the suspension of transportation during the lockdown.
Should the proposal be approved by Congress, the Office of Transportation Cooperatives, in partnership with government financial institutions and banks, will facilitate loan packages for the 1,187 transport cooperatives (TCs) that fall under the Department of Trade and Industry (DTI) and Cooperative Development Authority’s definition of micro, small and medium enterprises (MSMEs) as per Republic Act 8289, or the “Magna Carta for Small Enterprises”. Transport cooperatives which operate modern PUV units, can avail of the loans without any interest with a moratorium of three months up to a year from the date of loan release.
For PUV operators, the DOTr is also recommending the adoption of the terms and conditions under Landbank’s lending program, Landbank I Rescue. Loans shall be payable within five years with five per cent fixed interest per annum for three years, subject to annual repricing thereafter based on one year Bloomberg Valuation Service (BVAL) reference rate. Borrowers will only be required to pay interest fees during the first 24 months on either a monthly, quarterly, semi-annual or annual basis depending on their cash flow.
Part of the proposal also includes a recommended restructuring of existing or old loans to help unburden drivers and operators from possible compounded interest which will help them recoup from their losses to jumpstart their businesses. Monthly amortization of loans that were not paid for the month of March, April and May or the duration of the GCQ shall be amortized as a loan, and shall be paid for a period of 24 months, starting January 2021.
Borrowers may be given a 12-month moratorium on loan amortization, with at least six months without incurring interest and penalties on loan amortization. The accumulated amount from the moratorium period shall be paid by the borrower through staggered basis over the remaining years of the loan or through an extension of the loan period. Amortization of old and existing loans shall also be deferred until the end of the GCQ.
On fare increase, LTRFB clarified that no changes have been approved to date. According to LTFRB Chairman Martin Delgra III, the whole plan is to help the public transport industry to continue operating despite the reduced capacity and other public health considerations, which will result to lower income, by subsidizing its operations by government, thereby freeing the commuting public the adverse impact on fare.
“A fare hike is not being considered by the LTFRB. The DOTr stimulus package was prepared to address the situation of both the public transport providers and the commuting public. Through these incentives, drivers and operators will withstand the crisis without passing the burden of cost to commuters,” stated LTFRB Chairman Martin Delgra.
Moreover, a proposal to lease modern buses and jeepneys and government managing these public transport in selected routes is also being discussed and prepared by DOTr. The proposal, which is to be submitted and funded through the Bayanihan Law, will ensure physical distancing is followed during the GCQ, and guarantee efficient and available service for key routes in Metro Manila.
The official GCQ transport guidelines on strict sanitation and physical distancing within PUVs and terminals issued by the DOTr took full effect last May 1.