WHEREAS, the Department of Transportation (DOTr) issued Department Order No. 011, series of 2017, otherwise known as the Omnibus Guidelines on the Planning and Identification of Public Road Transportation Services and Franchise Issuance or Omnibus Franchising Guidelines (OFG), which aims to provide a reliable, safe, accessible, environment-friendly, dependable, efficient, and comfortable public road transportation throughout the country;

WHEREAS, the Land Transportation Franchising and Regulatory Board (LTFRB and/or Board), a sectoral agency of the DOTr, is tasked to implement the OFG;

WHEREAS, Section 11.2 of the OFG mandates the LTFRB to provide the mechanism for transitioning existing and new franchisees such that the transition will be completed within the specified three (3) year period;

WHEREAS, Section 5 of Executive Order No. 202 mandates the LTFRB œto prescribe and regulate routes of service, economically viable capacities and zones or areas of operation of public land transportation services provided by motorized vehicles in accordance with the public land transportation development plans  and  programs  approved  by  the  Department  of  Transportation  and Communications  and œto formulate, promulgate, administer, implement and enforce rules and regulations on land transportation public utilities, standards of measurements and/or design, and rules and regulations requiring operators of any public land transportation service to equip, install and provide in their utilities and in their stations such devices, equipment facilities and operating procedures and techniques as may promote safety, protection, comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operations ; and œto perform such other functions and duties as may be provided by law, or as may be necessary, or proper or incidental to the purposes and objectives of this Department Order ;

WHEREAS, the following Implementing Guidelines during the Transition Period are hereby promulgated:


A.   This Memorandum Circular (MC) shall apply to Public Utility Buses (PUBs), Mini-buses, Public Utility Jeepneys (PUJs), UV Express Services, Filcabs, School Services, Taxis, Transportation Network Vehicle Services (TNVS), Tourist Transport Services, and Shuttle Services as specified in the OFG.


A. After the transition period, all routes throughout the country must be rationalized. Said rationalization shall be tantamount to the cancellation of all existing Certificates of Public Convenience (CPCs).

B.  During the same period, existing operators must comply with all OFG requirements such as: 1) consolidation into a legal entity; 2) fleet management; and 3) OFG-compliant units, among others. Failure to comply with any of the said requirements shall render the operator ineligible to apply for a new CPC and the rationalized route shall be opened to all interested applicants. Compliant operators within the transition period may be given incentives (e.g., extended franchise validity) as deemed appropriate by the DOTr/LTFRB.


The following mechanism for transitioning existing and new franchises shall be adopted in order to achieve the principles herein stated:

A.   Existing Valid Franchises in Areas with LPTRP

1.  With approved Local Public Transport Route Plan (LPTRP), existing operators may be allowed to operate under their old individual franchises prior to their consolidation into a legal entity in consonance with MC 2018-008 on consolidation of franchise holder and application for a CPC.

2.  The use of their old units is allowed subject, however, to the road- worthiness test of the Land Transportation Office (LTO).

3.   Petition for Dropping and Substitution (DS) may also be filed with the LTFRB, pursuant to MC 2017-021, Board Resolution 2018-007 and MC 2018-012.

B.   Existing Valid Franchises in Areas without LPTRP

1.   For those with valid franchises expiring before the LPTRP approval, they may be allowed to file an Application for Provisional Authority (PA) with the LTFRB. The said PA shall be valid for one (1) year.

2.   Existing operators are to consolidate into a legal entity in consonance with MC 2018-008. Units for operation are subject to Item III (A) (2) and Item III (A) (3) of this MC.

C.   New Applications for New Franchises in Accordance with the Approved LPTRP

1.  Processing of applications for new franchises in accordance with the approved LPTRP shall be in accordance with LTFRB MC No. 2018-    or the œImplementing Rules on Selection of Transport Operators for LGU- Prepared LPTRPs under Department Order No. 2017-011, otherwise known as the Omnibus Franchising Guidelines .

D.   Social Support Mechanism

1.  All displaced operators and drivers, including transport industry allied workers, are eligible to avail of the social support programs of the DOTr in partnership with the Department of Social Welfare and Development (DSWD),  the  Department  of  Labor  and  Employment  (DOLE), Commission on Higher Education (CHED), and Technical Education and Skills Development Authority (TESDA).

2.  Specific  details  of  the  social  support  programs  shall  be  discussed through subsequent Memoranda of Agreement entered into between the DOTr and its partner-agencies.

3.   Partner-agencies shall not be limited to the DSWD, DOLE, CHED, and TESDA.  Other  government  agencies  and  Non-Government Organizations interested in providing support may enter into an agreement with the DOTr.

Notwithstanding Item Ill, the DOTr and the LTFRB shall impose such additional terms, restrictions, or limitations as may be deemed necessary to implement the policies and purposes of the OFG.


All other issuances inconsistent herewith are deemed modified or superseded accordingly.


This Memorandum Circular shall take effect after fifteen (15) days following its publication in at least one (1) newspaper of general circulation. Let three (3) copies hereof be filed with the UP Law Center pursuant to Presidential Memorandum Circular No. 11, dated 09 October 1992.

SO ORDERED.

Quezon City, Philippines, 30 May 2018.
 

(SGD) ATTY. MARTIN B. DELGRA III Chairman
(SGD) ENGR. RONALDO F. CORPUS Board Members	(SGD) ATTY. AILEEN LOURDES A. LIZADA Board Member
Attested by: (SGD) ATTY. SAMUEL A.M. JARDIN Executive Director