FILE PHOTO: LTFRB鈥檚 official Facebook page
The government has lifted a seven-year ban on the sale and transfer of franchises or certificates of public convenience (CPCs) of public utility vehicles (PUVs)鈥攍ong considered a money-making scheme among transport operators鈥攖o make it easier to distribute aid to beneficiaries of the fuel subsidy program.
鈥淎lso, operators can now easily join the Public Utility Vehicle Modernization Program (PUVMP) since they will be able to transfer and register their vehicles much faster,鈥� the Land Transportation Franchising and Regulatory Board (LTFRB) said in a statement on Thursday.
The franchising agency, however, said the new policy came with safeguards to prevent misuse of the sale and transfer of franchises for PUVs.
鈥楲ucrative business鈥�
In 2016, the LTFRB imposed a ban on applications for the sale and transfer of franchises because of 鈥渂uy and sell operators鈥� who 鈥渁bused and hijacked鈥� the franchising process as they turned it into a 鈥渓ucrative business.鈥�
鈥淭hese are usually transport operators who apply for franchises/CPCs with the Board on various services and lines that they proposed to operate on the service applied for should the application be granted,鈥� the agency said in its Memorandum Circular No. 2016-010.
However, upon the approval of the applications, the LTFRB said, the operators would instead sell the franchises at a hefty profit to interested vehicle owners who had no existing franchise or CPC yet鈥攁 scheme that prompted the board to prohibit applications entirely on Aug. 13, 2016.
In the 2016 memorandum, the LTFRB emphasized the right of the state to regulate public utilities as a legitimate exercise to protect the public.
Citing jurisprudence, the memorandum said a CPC 鈥渃onstitutes neither a franchise or a contract, confers no property rights and is a mere license or privilege and the holder of such certificate does not acquire a property right over the route covered thereby. Nor does it confer upon the holder any propriety right, interests, or franchises in a public highway. Revocation of this certificate deprives him of no vested right.鈥�
鈥淭his has been a lucrative business which mocks the very purpose why franchises/CPCs are applied for and granted,鈥� the memorandum added.
In its decision to lift the ban, the LTFRB cited the implementation of the PUVMP, in which owners of PUVs who failed to transfer and register their vehicles in their name were unable to receive the benefits under the fuel subsidy program.
The program is intended to alleviate the impact of inflation on transport workers, especially PUV drivers.
Under Memorandum Circular No. 2023-027, the agency noted that the affected franchise vendors were only given a 15-day period, which was 鈥渢oo compressed鈥� to process the sale and transfer of CPCs before the implementation of the ban in 2016.
The LTFRB also cited the appeal of some transport groups, such as Nagkakaisang Samahan ng mga Nangangasiwa ng Panlalawigang Bus sa Pilipinas Inc., which requested the agency to revisit and evaluate the memorandum circular.
鈥淭he Board agreed that the absolute prohibition set forth under MC 2016-010 be set aside,鈥� the LTFRB said, adding that it also included safeguards in allowing the transfer of CPCs 鈥渢o deter the fraudulent schemes鈥� previously employed by some operators.
Among the conditions in the sale and transfer of franchises is that 鈥渢he CPC subject for transfer must be valid and subsisting at the time of the application.鈥�
Another condition is that 鈥渢he transfer must also cover all authorized units under the subject CPC and no fractional transfer of CPC shall be allowed.鈥�
鈥淥nly two transfers shall be allowed during the validity of the CPC, provided that no transfer shall be allowed during the first year from the grant of CPC nor during the one year prior to the expiration of the validity of the CPC,鈥� the LTFRB said.
According to LTFRB Chair Teofilo Guadiz III, the agency was 鈥渕indful of the situation鈥� as it took careful consideration in lifting the ban.
鈥淲e needed to strike a balance between allowing a legitimate CPC transfer and at the same time deter any form of abuse,鈥� he said.
Earlier this month, the Department of Transportation said it hoped to start distributing fuel subsidies to transport workers by the end of August, once it received the P2.95-billion fund from the budget department.
The LTFRB is expected to distribute the cash aid to some 1.64 million PUV drivers, including tricycle drivers and delivery riders.