(Statement of the National Union of Peoples’ Lawyers – Panay Chapter)
THE LAND Transportation Franchising and Regulatory Board (LTFRB) on February 20, 2023 issued Memorandum Circular No. 2023-13 extending the deadline, from March 31 to June 30 of this year, for individual PUV operators to comply with the PUV Modernization Program’s mandatory consolidation of franchises.
Later, on March 1, the LTFRB further extended the deadline to December 31 following the announcement of various transport groups of a planned nationwide transport strike and after the Senate passed Resolution No. 44 urging the LTFRB to suspend the impending jeepney phaseout.
According to the LTFRB memorandum, individual operators of traditional jeepneys, UV express units, and multi-cabs will no longer be allowed to operate after the deadline unless they incorporate or join a cooperative. Failure to do so will result in the cancelation of their franchise or certificates of public convenience (CPCs).
The National Union of People’s Lawyers – Panay Chapter stands with all affected PUV operators and drivers against the mandatory consolidation of franchises for being prejudicial against drivers and individual operators, especially of traditional jeepneys or PUJs, and for violating their freedom of association. The LTFRB has no legal basis to revoke the franchises or CPCs of PUVs on the ground of failure or refusal to join a consolidated entity.
The government’s modernization program is focused on vehicle replacement, with the end goal of removing traditional jeepneys from public roads and replacing them with modern vehicles or buses that use Euro IV to Euro VI engines. This program threatens the livelihoods of jeepney drivers and imposes an immense financial burden on both drivers and operators considering that the mandatory purchase of replacement vehicles amounts to Php2.4 million per unit.
Although the government promised to grant loans to operators, such as those through the Development Bank of the Philippines and Landbank, these loans are not enough to cover the cost of the units and their maintenance and would leave PUV operators saddled with enormous debt, as confirmed by the experience of those who already availed of similar credit arrangements.
Moreover, the government is forcing PUJ operators to join cooperatives or form corporations, claiming that doing so would expedite the process of securing loans and proceeding with the planned jeepney phase-out. The LTFRB memorandum threatens to revoke the operators’ franchises unless they do so by December 31.
Cancelling a PUV operator’s franchise or CPC for declining to incorporate or join a cooperative violates his or her freedom of association and right to due process, both enshrined in the 1987 Constitution. Just as one has the liberty to form or join an organization, that individual has every right in refusing to do so. No person can be compelled to become a member of any group, and cancelling a franchise because of his or her refusal is a clear violation of that freedom of choice. Furthermore, the drivers and operators who stand to have their franchises revoked have not violated any law, yet, the government would deprive them of their livelihoods for failing to consolidate.
Joining a cooperative must, in essence, be a voluntary act. An indispensable principle of being in a cooperative is that membership is purely voluntary, as highlighted in Article 4 of the Philippine Cooperative Code of 2008 – a principle with which mandatory consolidation is directly in conflict. Being part of a cooperative involves numerous responsibilities including the payment of membership fees and contributions and compliance with its rules and regulations. Hence, membership must be voluntary, not coerced through administrative issuances like the LTFRB memorandum.
Convention 87 of the International Labor Organization, which the Philippines ratified, also states that “workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to join organizations of their own choosing without previous authorization.” The ILO Convention adds that public authorities should refrain from any interference which would restrict or impede the exercise of this right.
Clearly, pushing through with the jeepney phase-out and cancelling the franchises of individual operators would be contrary to both domestic law and international obligations undertaken by the Philippines.
In laying down restrictions on the transport sector, the government often claims that a franchise is not a right but merely a privilege. Such an assertion, however, does not justify government excesses. The law still protects the public from the arbitrary and abusive exercise of state power, and the revocation of a franchise on the ground cited by the LTFRB regulation is, apart from being abusive and arbitrary, a serious infringement on a constitutionally-protected freedom.
While modernizing the transport system is a valid state objective, it cannot be done in a manner that transgresses fundamental rights. More importantly, a modernization program should not unduly burden the public, create financial hardships for small transport operators, or put thousands of drivers out of work and potentially bring them and their families to the brink of poverty./PN
