The Department of Transportation (DOTr) is eyeing fuel subsidy and loan packages for public utility vehicle (PUV) drivers and operators under general community quarantine (GCQ).
The proposals are among a raft of financial and socio-economic measures sent by DOTr to Congress and will form part of government’s stimulus package to combat effects of the coronavirus disease (COVID-19).
“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,” Transportation Secretary Arthur Tugade said in a statement.
Data from the Land Transportation Franchising and Regulatory Board (LTFRB) shows that 534,767 workers employed in the road transport sector have been affected by 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 1,187 transport cooperatives that fall under the Department of Trade and Industry and Cooperative Development Authority’s definition of micro, small and medium enterprises 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, DOTr is recommending the adoption of terms under Landbank’s lending program, Landbank I Rescue. Loans will be payable within five years with 5% fixed interest per annum for three years, subject to annual repricing based on the 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 includes a restructuring of existing or old loans to help unburden drivers and operators from compounded interest. Monthly amortization of loans unpaid for the months of March, April and May—the duration of the GCQ–will 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 will be paid by the borrower on a staggered basis over the remaining years of the loan or through an extension of the loan period. Amortization of old and existing loans will also be deferred until the end of the GCQ.
“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,” LTFRB chair Martin Delgra III said.
A proposal to lease modern buses and jeepneys and government managing such vehicles in select routes is being discussed and prepared by DOTr. The proposal, to be submitted and funded through the Bayanihan to Heal as One Law, will ensure physical distancing is followed during the GCQ, and guarantee efficient and available service for key routes in Metro Manila, DOTr said.
The DOTr’s GCQ transport guidelines on strict sanitation and physical distancing within PUVs and terminals took full on May 1.
