PTMP Forum 2: The Continuing Challenge of Financing
The second forum on the Public Transport Modernization Program (PTMP) focused on addressing the persistent financing challenges faced by transport service entities (TSEs), particularly cooperatives and corporations. The forum was organized by the UP National Center for Transportation Studies, in cooperation with the Transportation Science Society of the Philippines (TSSP) and SafeTravelPH Mobility Innovations Organization Inc. (SafeTravelPH).
Three key presentations provided updates and perspectives:
- Mr. Zion Yuson of the Department of Transportation (DOTr) shared updates on the PTMP financing component, focusing on the 5-6-7 loan scheme and the 10 percent equity subsidy. He noted that many cooperatives contribute no equity, resulting in weak ownership and a high loan default rate of 23.86 percent. Key issues include route competition, vehicle breakdowns, and lack of after-sales support. In response, the DOTr is enforcing stricter regulations, enhancing training with the CDA and OTC, and requiring long-term support from accredited vehicle suppliers. Future strategies include revising subsidy structures, exploring e-PUV financing and leasing models, and accrediting more reliable and affordable vehicle brands, with an emphasis on evaluating TSE and route viability before requiring modernization.
- AVP Raquel Anzures of the Development Bank of the Philippines (DBP) presented the bank’s support for PTMP through the PASADA Program, which finances unit acquisition and support facilities for TSEs. Since 2017, the fund has expanded from PHP 1.5 billion to PHP 10 billion, with PHP 8.6 billion in approved loans and 3,392 units financed. DBP initiated efforts to raise the equity subsidy from PHP 180,000 to PHP 280,000, and now proposes increasing it to PHP 360,000. Key challenges identified include route competition, weak financial management among cooperatives, frequent leadership turnover, high maintenance costs, and limited regulatory enforcement. DBP emphasized the need for stronger route viability assessments and regulatory support to improve loan repayment and sustain financing.
- Ms. Camille Fajardo of SafeTravelPH presented a network-based assessment of public transport in Puerto Princesa City, revealing financial struggles among cooperatives due to oversupply, low demand, and high service costs despite subsidies. Using tools such as the SafeTravelPH app, GIS, OpenPaths, and a PTMP calculator, her team modeled route viability and fleet requirements based on real-world demand data. She emphasized the limitations of current LPTRP approaches and called for data-driven, network-level planning with flexible fleet mixes, phased modernization, and operational support. She also stressed the need for transition financing and the importance of validated, on-the-ground data in transport planning.
The panel discussion reiterated that viable PTMP financing must go beyond individual routes to consider service areas, actual demand, and operator capacity. The DOTr highlighted the need to complete LPTRPs before requiring fleet modernization and to focus on building TSE capacity for sustainable operations. DBP and NFTC emphasized early return on investment, stronger government support, and cooperative-led diversification to manage financial risks. SafeTravelPH advocated performance-based, data-driven service contracting, while TSSP proposed cross-subsidization and centralized management to improve operational efficiency. The panel concluded with calls to integrate financial analysis into route planning, support continuous knowledge-sharing among cooperatives, and tailor modernization efforts to local conditions.
In her closing remarks, TSSP President Dr. Ma. Sheilah Napalang reminded participants that PTMP is about people, not just profit. She emphasized the urgency of addressing safety, inclusivity, and service reliability in light of increasing road crashes. She urged stronger collaboration with LGUs on LPTRPs, stating that limited local capacity must not hinder progress. She called for critical thinking beyond raw data, advocated targeted training for cooperatives on financial and asset management, and noted that loan defaults often result from both low revenues and mismatched financing terms. She reaffirmed the role of service contracting as a mechanism to guarantee performance-based service. In conclusion, she identified four priorities: fleet modernization, route rationalization, completion of LPTRPs, and industry consolidation.
The full transcript of the Public Transportation Modernization Program (PTMP) Forum 2: The Continuing Challenge of Financing is available below.
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