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Solon wants reduced loan interest for PUV modernization

Republika

Sen. Grace Poe urged the Land Transportation Franchising and Regulatory Board (LTFRB), Land Bank of the Philippines and the Development Bank of the Philippines (DBP) to further reduce the interest rate on public utility vehicle (PUV) modernization loans to four% from six% to lessen the financial burden of operators and drivers.

“If we want to really help our public transport sector transition to PUV modernization, all support must be extended to our operators and drivers who have been among the hardest hit by the pandemic,” said Poe, chairperson of the Senate public services committee.


At the hearing Tuesday on Senate Bill No. 867 or the Just and Humane PUV Modernization Act, Confederation of Drivers and Operators in Central Luzon Chairman Danilo Yumul stressed that drivers and operators cannot afford to borrow because of the six-percent interest rate and the length of loan term.


Yumul also said that even before the pandemic, drivers could not afford the P40,000 monthly payment for the new PUV, and more so in this time of pandemic.


“Hindi kami liability, asset kami,” Yumul said as he explained that they have not received any subsidy for the PUV modernization.


Poe asked Yumul and other stakeholders to furnish the committee the same letter that they will submit to the LTFRB that will outline their concerns.
Poe said that the six-percent interest rate could still be reduced to four%, as the two-percent reduction can serve as “subsidy” for the drivers and operators.


“Lahat po ng mga hinihingi ninyo i-submit ninyo po ‘yung sulat sa amin, ‘yung ibibigay niyo kay Chairman (Martin) Delgra… Katulad nga kasi six% na interes, mataas pa ‘yun, pwede pang babaan,” Poe said.
“Ang Land Bank at DBP… kung mayroon silang interest na kahit four%, okay na ‘yun, parang subsidiya na ‘yung extrang two% na matitipid ng ating mga driver imbes na six% ang babayaran nila,” Poe said.


Under the bill, the government will be tasked to provide financial assistance of not less than 10% of the price per unit. The interest rate on loan amortization should also not exceed four% diminishing annual interest, considering the nature of PUV services.


Meanwhile, LTFRB Chair Martin Delgra disclosed that a total of 2,589 units have been modernized as of Dec. 2020, an increase of 82.2-percent compared to the same time last year despite the pandemic. On the other hand, a total of 81,092 units have been consolidated as of March 5, 2021.


“My takeaway from the whole presentation is that there’s a marked improvement of those who are willing to join, pero hindi natin maipagkakailang marami pa ring napag-iiwanan,” stressed Poe.


Data show that there will be around a hundred thousand PUV drivers and operators who will be displaced as a result of the PUVMP, but Delgra clarified that operators who have yet to consolidate in time for the March 31 deadline will not be forced to phase out but are given time to consolidate within the year.


“In order to truly heal and recover as one, we need to lift unnecessary burdens caused by deadlines and requirements that could not possibly be met by hundreds of thousands of PUV operators,” said Poe.


The key components of the PUVMP include Local Public Transport Route Planning (LPTRP) where local government units are required to prepare their own LPTRP that will be implemented in their selective localities, route rationalization that aims to address operational inefficiencies and worsening of traffic conditions, fleet modernization, industry consolidation, and social support mechanisms.


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