Sen. Grace Poe urged the Land Transportation Franchising and Regulatory Board (LTFRB), Land Bank of the Philippines and the Development Bank of the Philippines (DBP) to further reduce the interest rate on public utility vehicle (PUV) modernization loans to four percent from six percent to lessen the financial burden of operators and drivers.
“If we want to really help our public transport sector transition to PUV modernization, all support must be extended to our operators and drivers who have been among the hardest hit by the pandemic,” said Poe, Chairperson of the Senate Public Services Committee.
At the Poe-led hearing Tuesday on Senate Bill No. 867 or the Just and Humane PUV Modernization Act, Confederation of Drivers and Operators in Central Luzon Chairman Danilo Yumul stressed that drivers and operators cannot afford to borrow because of the six-percent interest rate and the length of loan term.
Yumul also said that even before the pandemic, drivers could not afford the P40,000 monthly payment for the new PUV, and more so in this time of pandemic.
“Hindi kami liability, asset kami,” Yumul said as he explained that they have not received any subsidy for the PUV modernization.
Poe asked Yumul and other stakeholders to furnish the committee the same letter that they will submit to the LTFRB that will outline their concerns.
Poe said that the six-percent interest rate could still be reduced to four percent, as the two-percent reduction can serve as “subsidy” for the drivers and operators.
“Lahat po ng mga hinihingi ninyo i-submit ninyo po ‘yung sulat sa amin, ‘yung ibibigay niyo kay Chairman (Martin) Delgra… Katulad nga kasi six percent na interes, mataas pa ‘yun, pwede pang babaan,” Poe said.
“Ang Land Bank at DBP… kung mayroon silang interest na kahit four percent, okay na ‘yun, parang subsidiya na ‘yung extrang two percent na matitipid ng ating mga driver imbes na six percent ang babayaran nila,” Poe said.
Under the bill, the government will be tasked to provide financial assistance of not less than 10 percent of the price per unit. The interest rate on loan amortization should also not exceed four percent diminishing annual interest, considering the nature of PUV services.
