Budget Watch

As Bayanihan 2 expires, LTFRB to use 2021 budget for PUV program

Aika Rey
As Bayanihan 2 expires, LTFRB to use 2021 budget for PUV program

FREE RIDES. The Department of Transportation provides free rides for health workers and authorized persons outside of residence through its PUV service contracting program.

Department of Transportation

(1st UPDATE) The Land Transportation Franchising and Regulatory Board says the P3-billion fund under the 2021 budget will be used

The Land Transportation Franchising and Regulatory Board (LTFRB) will access its 2021 budget to continue tapping public utility vehicles (PUVs) which give free rides to the public.

This is because funds under the Bayanihan to Recover as One Act (Bayanihan 2), including funds for the PUV service contracting program, are set to expire on Wednesday, June 30.

“Dahil sa malaking tulong ng programa sa ating mga pasahero, operator, at drayber, itutuloy muli ang pagpapatupad sa programa sa ilalim ng Republic Act 11518 o General Appropriations Act (GAA) 2021,” the LTFRB said on Tuesday, June 29.

(Since the program has been a huge help to passengers, operators, and drivers, we will continue to implement the program under Republic Act No. 11518 or the 2021 GAA.)

The free rides given under the PUV service contracting program are part of assistance from the Department of Transportation (DOTr) during the pandemic.

LTFRB Chairman Martin Delgra III said on Tuesday that there will be no changes to the program, even as it shifts to another funding source.

Delgra told reporters that the LTFRB has already asked the Department of Budget and Management for funds, which the latter is now processing for disbursement.

Delgra also said the regulatory board is “doing everything it can” to ensure that the program shifts funding sources seamlessly.

The DOTr has P5.58 billion under Bayanihan 2, but as of June 21, only around P1 billion had been disbursed to drivers since the program started in October 2020.

The LTFRB has yet to determine the amount that will remain from its Bayanihan 2 funds. Delgra said the regulatory board has yet to finish collating data from operators, as this is done weekly.

But since Bayanihan 2 funds are expiring in the middle of the week, the LTFRB said it will need to have all the data “before the month ends” – which is either by Tuesday or by Wednesday. The remaining funds that will not be obligated for payment will have to revert to the National Treasury.

Under the 2021 budget, the service contracting program has an appropriation of P3 billion. While the amount is lower, it remains to be seen if the LTFRB would be able to disburse the funds more quickly. (READ: Delayed, inadequate payments hound LTFRB’s PUV contracting program)

It is also uncertain whether the validity of Bayanihan 2 funds would be extended further, as Presidential Spokesperson Harry Roque said on Tuesday that there are no updates yet on whether President Rodrigo Duterte would call for a special session on the matter.

The validity of Bayanihan 2 funds has already been extended once – from December 19, 2020, to June 30, 2021. Roque said P9 billion of the unspent P18 billion has already been obligated by the government.

Why is this important?

The service contracting program is also seen as a way to modernize the transportation system in the country.

Under the program, the government hires PUVs and pays the operators based on the kilometers traveled and other performance indicators – a departure from the boundary system of PUVs which previously pushed drivers to accommodate as many passengers as they could.

Although not initially part of PUV modernization plans, the service contracting program was implemented by the DOTr as it rationalized bus and jeepney routes in Metro Manila and in other parts of the Philippines.

The LTFRB, under Memorandum Circular (MC) No. 2021-030, had said that PUV drivers part of the program as of April 30 would get a one-time incentive worth P25,000. Drivers who would join the program by the end of May would receive a P20,000 incentive.

The MC also included a P7,000 performance incentive for drivers who would log into the system application five times a week.

These are on top of the incentives under LTFRB MC No. 2020-079, which calculates performance incentives not more than 10% of the net weekly payout.

Transportation Secretary Arthur Tugade earlier said that the department will conduct a review of the free rides, following viral reports of long lines at the EDSA Busway.

Tugade said the DOTr will be looking into whether PUVs should already start charging fares or whether the department should expand the program to include railways. – Rappler.com

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.