The Land Transportation Franchising and Regulatory Board (LTFRB) is set to implement the increase in equity subsidy for Public Utility Vehicle (PUV) operators that are members of transport cooperatives and corporations eligible to purchase modernized vehicles under the Public Utility Vehicle Modernization Program (PUVMP).
Through the Department of Transportation’s (DOTr) Department Order 2020-006 signed on 05 June 2020, existing PUV operators with valid franchises and PUV operators applying for new and developmental routes under the PUVMP are qualified for an equity subsidy in the fixed amount of P160,000 from the original P80,000.
Included in the increase of subsidy are PUV operators who are applying for new or developmental routes, also those with applications from July 2018.
DO 2020-006 was approved by DOTr Secretary Arthur P. Tugade upon recommendation of the DOTr Road Sector in light of economic factors that prompted the increase in price of modernized PUV units from P1.6-M to P2.4-M.
The equity subsidy is the financial loan provided by the Development Bank of the Philippines (DBP) under the PUVMP to help PUV operators procure modernized units. Under the said program, a 5% equity subsidy is provided for consolidated franchises that wish to purchase modernized units, with the remaining balance made with 6% interest, payable in seven (7) years.
To be eligible for the equity subsidy, PUV operators under consolidated franchises should also be compliant with the guidelines prescribed by LTFRB Memorandum Circular 2018-006, 2018-008, and 2018-013.
According to DO 2020-006, LTFRB is mandated to implement the increased equity subsidy under PUVMP through a memorandum circular within 30 days from the issuance of the Department Order.