QuestionsQuestions (LTFRB MEMORANDUM CIRCULAR NO. 92-009)
It applies to persons, corporations, firms, or associations that own and/or operate 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 Philippine corporation/partnership/association/joint-stock company organized under Philippine law with at least 60% of its capital stock or paid-up capital belonging entirely to Philippine citizens.
The applicant must be financially capable to establish/initiate/maintain/sustain the proposed service and meet claims arising from accidents.
It refers to benefit for all people and promotion of general welfare through increased service levels and fares offered to passengers, and enhancement of healthy competition.
CPC issuance is determined by public need; there is a presumption of public need in favor of the applicant, while the oppositor bears the burden of proving that there is no need for the proposed service.
Entry and exit are liberalized to introduce and/or enhance competition in rates charged and quality of service in land transportation operations, consistent with the Public Service Act.
There shall be a minimum of two (2) operators in any route; routes served by only one (1) operator shall be immediately opened for entry to at least one (1) additional operator of the same or better mode/type.
Operators that develop routes with no existing authorized operators may be authorized to provide services, with protection of investment for a maximum of two (2) years, after which the route/link shall be opened for entry to at least one (1) additional operator.
Examples include: (1) the new entrant can provide more efficient and cost-effective competitive service; (2) the entrant introduces quality improvements/innovative or technologically advanced services superior to existing operators; (3) the route warrants additional capacity or existing operators have not been sensitive to increased demand; (4) the actions/practices of existing operators result in lack of effective competition; (5) existing operators have abandoned operations; (6) existing operators have been contumaciously violating the Public Service Law or CPC/LTFRB terms and conditions.
If an operator totally or partially abandons/withdraws/suspends service on its authorized route (or portions) for one (1) month or more, the Board may declare forfeiture of the operator’s right to its certificate.
The operator must file a notice of withdrawal/suspension with the LTFRB at least fifteen (15) days prior to the withdrawal/suspension.
They may increase units through replacement (with bigger capacity where applicable) and introduction of additional units, but only after an application is filed with and approved by the LTFRB.
Changes/amendments to authorized routing patterns may be allowed subject to conditions set under LTFRB Memorandum Circular No. 91-007.
It calls for continuous upgrading of quality and safety standards, including: upgrading vehicle insurance cover values for death and injury costs; requiring annual LTO inspection under the MVIS system; and establishing separate examination systems for drivers of passenger and freight PU vehicles in 1995.
Pricing control is liberalized to introduce price competition complementary with quality, subject to prior notice and public hearing; fares shall not be provisionally authorized without public hearing. It also discusses fare range widening (+20% / -25% limit in 1994) and liberalization for aircon buses to cover first class and premier services.
They are: (1) availability of funds sufficient to establish/initiate and sustain operations—actual working capital must meet the required working capital (with computation using operating/admin/interest expenses and revenue adjusted by average aging receivables), plus equity investment of 30% of the rolling stock/units to be franchised; and (2) sufficient financial reserves to meet accident claims through satisfactory insurance acceptable to LTFRB.
A CPC has a validity period of five (5) years from issuance.
It takes effect fifteen (15) days after its publication once in a newspaper of general circulation in the Philippines.