QuestionsQuestions (MEMORANDUM CIRCULAR NO. 2018-008)
MC No. 2018-008 is issued pursuant to the mandate under DOTr Department Order (DO) No. 2017-011 (Omnibus Franchising Guidelines) and LTFRB’s powers under Executive Order (EO) No. 202, particularly to issue/amend/cancel CPCs and to promulgate rules for proceedings before the Board. Its purpose is to adopt rules and procedures for consolidating public transport franchise holders into a single juridical entity.
It defines “Existing Individual Franchise Holders” as franchise holders with valid and subsisting franchises operating in an authorized route with (a) less than one-third (1/3) of the total number of units for the route, or (b) less than fifteen (15) units that are confirmed and registered for the current year or the immediate preceding registration year with the LTO.
MC No. 2018-008 grants priority in the issuance of updated franchises to applicants who consolidate into a single juridical entity for the operation of public land transportation services. It specifically recognizes petitions of individual franchise holders that voluntarily cancel their individual franchises and convert into one juridical entity (e.g., cooperative or corporation).
For inter-regional routes, the Petition for Consolidation of CPCs must be filed with the LTFRB Central Office; for intra-regional routes, it must be filed with the Regional Franchising and Regulatory Offices (RFROs), subject to the Board’s rules.
The petition must indicate the individual Case Nos. of the franchises for consolidation and the route applied for.
The MC requires: (1) SEC Certificate of Incorporation (corporations) or CDA Certificate of Registration and OTC Certificate of Accreditation (cooperatives); (2) Management Agreement between cooperative and its members (for cooperatives); (3) Latest Financial Statement; (4) Proof of operation of off-street terminal at both ends of the routes (consistent with DO 2017-011 item 5.3); (5) Proof of garage (TCT if owned or Contract of Lease/Authority to Use with lessor’s TCT, with LGU zoning clearance); (6) OR/CR of authorized units; and (7) New Format Operator’s Data Sheet.
The Legal Division issues a Notice of Hearing and sets the case for hearing to determine compliance with jurisdictional, citizenship, financial, garage requirements, and proof of public need (if applicable). The petitioner must also present the original copies of the individual CPCs of the constituent franchise holders.
If the Board finds merit, it cancels the existing individual CPCs and grants an updated or consolidated CPC in favor of the consolidated juridical entity.
Yes. Consolidated juridical entities with updated and consolidated CPCs may continue operating in the previously authorized routes in the absence of the LPTRP covering the route or the DOTr transport study; however, their operation is subject to modification as recommended by DOTr.
It must designate the required number of authorized units which shall ply an authorized route under its updated CPC.
They have one (1) year from the effectivity of the MC to consolidate and file the necessary Petition for Consolidation of their CPCs.
After the lapse of the period, the LTFRB will consider applications for the Issuance of New CPC filed by single juridical entities on the authorized route of existing individual franchise holders.
They must comply with the vehicle types and specifications in accordance with DO 2017-011 (Hierarchy and Classification of Public Transportation Modes and Modernization of Public Transport Services). They must substitute old units with OFG-compliant units installed with OFG-mandated devices within three (3) months from issuance of the Decision/Order consolidating their franchises.
They must operate under a fleet management system designed to remove or minimize risks associated with vehicle investment, improve efficiency and productivity, reduce overall transportation and staff costs, and ensure compliance with public land transportation rules and regulations.
It takes effect immediately following its publication in a newspaper of general circulation and upon filing of three (3) copies with the UP Law Center pursuant to Presidential Memorandum Circular No. 11 (dated 09 October 1992).
It states that all other issuances or parts thereof inconsistent with MC No. 2018-008 are modified, amended, or superseded accordingly.