Question & AnswerQ&A (LTFRB MEMORANDUM CIRCULAR NO. 92-009)
The policy guidelines cover persons, corporations, firms, or associations owning and/or operating public land transportation services to carry passengers and goods.
A CPC is an authorization issued by the LTFRB for the operation of land transportation services for public use as required by law.
The applicant must be a Filipino citizen or a corporation, partnership, association, or joint-stock company organized under Philippine laws with at least 60% of its capital stock belonging entirely to Philippine citizens.
The applicant must be a Filipino citizen or entity as defined, financially capable to undertake the proposed service and meet operational responsibilities, and prove that the service will promote public interest properly and suitably.
Public interest means the benefit for all people and the promotion of general welfare through increased service levels, fair fares, enhanced competition, and better services offered to passengers.
Entry and exit shall be liberalized to enhance competition, with minimum operators on routes, entry allowed for new providers in monopolized or development routes, and provisions for operators' withdrawal with prior notice.
Operators may be declared to have forfeited their CPC if they abandon or suspend service for one month or more; however, withdrawal or suspension is allowed if a 15-day prior notice is filed with the LTFRB.
Existing authorized operators may replace vehicles with bigger capacity and add units after applying for and obtaining LTFRB approval.
Operators must continuously upgrade quality and safety standards, including vehicle insurance, roadworthiness through annual inspections, and driver examination systems to ensure safe, adequate, efficient, and comfortable services.
Fare control is liberalized to encourage price competition linked to service quality, with fare ranges expanded and provisional fare increases requiring public hearings.
Financial capability requires sufficient working capital to sustain operations and equity investment equivalent to 30% of rolling stock value, along with insurance coverage satisfactory to LTFRB for accidents.
The CPC is valid for five (5) years from the date of issuance.
Violations can lead to disapproval of CPC applications and penalties under the Public Service Act and LTFRB regulations following due notice and hearing.
'Monopoly' refers to the operation by one or a group of franchised operators in a route resulting in lack of effective competition.
A development route is a lightly trafficked area without existing authorized service, having residential, tourist, or commercial potential, where operation may not be financially viable but is desirable for economic, political, or social reasons.
Protection and conservation of investments already made by operators, particularly those who start service on development routes, protected for up to two years before additional operators may enter the route.
Operators are guided to use common or public terminals developed or adopted by Local Government Units (LGUs) under the Local Government Code (RA No. 7160).
RMC is a theoretical basis used to determine vehicle demand on any route and serves as a guide in evaluating franchise applications, not as a limit to services offered when public need is proven.
The operator must file a written notice of withdrawal or suspension with the LTFRB at least 15 days before the intended action.