In Defense of CPC Applicants Under Memorandum Circular No. 2019-016 of the LTFRB

Following the issuance of Memorandum Circular (MC) No. 2019-016 by the LTFRB on 26 March 2019, allowing 200 additional taxi units to operate on the route Baguio City / La Trinidad to any point in CAR, four (4) legal entities, a corporation and three (3) transport cooperatives, filed Applications for Qualification with LTFRB-CAR to qualify for issuance of Certificate of Public Convenience (CPC).

After evaluation by the Pre-Qualification Committee of LTFRB-CAR, these applications which did not qualify due to the stringent requirements of the MC were forwarded to the Board en banc in Quezon City for further deliberation and review for possible grant of Notice to Apply for issuance of franchise or CPC. But until now, there is yet no resolution on these applications by the Board en banc.

In the interim, oppositions against the implementation of MC No. 2019-016 from existing taxi operators and the Local Government Units particularly Baguio City have mounted despite the fact that implementations thereof have already begun. The Baguio City Council has in fact introduced a Proposed Resolution (PR Nr. 0095-19), opposing the implementation of the MC. And, no less than City Mayor Magalong who is also opposing the grant of CPC thereof has disclosed that DOTr Secretary Tugade, after his meeting with him, has called on the LTFRB to suspend the issuance of the 200 franchises applied for under MC 2019-016.

The call of Secretary Tugade to LTFRB Chairman Delgra finally materialized with the issuance of Board Resolution No. 231, Series of 2019 resolving to SUSPEND the issuance of franchises in the opened 200 regular taxi units for Baguio City / La Trinidad, Benguet to any point in CAR as provided under MC No. 2019-016, as well as, the 200 premium taxi units opened under MC No. 2019-032 but later reduced to 100 units as per M.C. No. 2019-048 issued on 18 September 2019.

Relative thereto, I will have to say that this Suspension under Board Resolution No. 231, if not reconsidered by the Board en banc, will be UNFAIR and UNJUST to the applicants who have fully complied with the stringent requirements of LTFRB. In particular, ERMADRADA Taxi Transport Corp. (ERMADRADA for short) and TRUSTED BLIST ALLIANCE OF TRANSPORT MULTI-PURPOSE COOPERATIVE (TBATMPC) who have EACH invested the amount of more than P50M for the costs of 50 new compliant units already purchased from Toyota Baguio and for maintaining a financial networth of P800,000.00 multiplied by the number of the 50 proposed units or P40M.

If it is not UNFAIR and UNJUST to suspend the issuance of the franchises under the foregoing circumstances and in the middle part of implementation of MC No. 2019-016, we don’t know what is! For, in the FIRST PLACE, the applicants legally filed their applications pursuant to a validly promulgated MC No. 2019-016 which was issued after consultation with concerned LGU or Baguio City as required under Sec. 1 (c) of the Local Government Code of 1991; SECONDLY, the applications under MC No. 2019-016 are not new entry applications but a replacement of the taxi units cancelled by LTFRB for failure by owner-operators to extend the validity of their expiring franchises; THIRDLY, contrary to the claim of the oppositors, the alleged congestion to be caused

by the “additional” units had been inputted when the cancelled 183 or so units were issued their franchises in the first instance.

This writer believe that instead of focusing on the traffic congestion that may be caused by the “additional” replacement units, it would better served the interest of Baguio City were the Honorable Mayor and City Council would consider other measures to reduce or declog traffic congestion in Baguio City like: (a) the strict and efficient implementation of the moratorium prohibiting public utility vehicles issued with CPCs from other regions entering and touching BLISTT area, in violation of Memorandum Circular No. 98-026; (b) the filing of petition asking LTFRB to cancel the thousands of CPCs issued illegally by Regional Directors for a fee in violation of the moratorium through the years since 1996. Pursuant to the general welfare provisions of the Local Government Code, the City, for the interest and protection of its constituents, has the power to demand the cancellation of these illegal franchises causing the intense traffic in Baguio City.

Last but not the least, following the Doctrine of Operative Fact, implementation of MC No. 2019-016 may not be suspended or stayed against applicants ERMADRADA and TBATMPC. For, while the general rule is that a voided law or administrative issuance cannot be a source of legal rights or duties, the Doctrine of Operative fact as enunciated by the Supreme Court in many cases (Royal L. Rutter vs. Placido Esteban, G.R. No. L-3708, May 18, 1953; Planters Product Inc. vs. Fertiphil Corp., G.R. No. 166006, March 14, 2018, for instance) is an EXCEPTION to the general rule such that an executive or administrative order declaring the suspension or non-implementation of an otherwise valid rule may not obliterate the effects and consequences done prior to the declaration of nullity / suspension or non-implementation of said rules, if it would result to INEQUITY and INJUSTICE. Otherwise put, it will truly be UNFAIR and UNJUST to ERMADRADA and TBATMPC who, just upon filing of application for qualification were already required to present fifty (50) actual units to qualify for issuance of CPC, they were mandatorily required to show or present fifty (50) actual compliant units (minimum), costing more than P50M, and to show financial capability networth of P40M for 50 units, not to mention the high costs of limited garage space in the city for use by the proposed taxi units. The INJUSTICE and INEQUITY thereof is clear and apparent as seen in the fact that they are deprived of a chance to recoup the costs of investment because their applications for CPCs are stalled with the sudden suspension in the grant of CPCs, by issuance of resolution 231 series of 2019 by the LTFRB.
For these and other reasons, we sincerely believe that applicants ERMADRADA and TBATMPC and possibly others whose applications may later be accepted and qualified by LTFRB-CAR under MC No. 2019-016 are entitled to a reconsideration of the Suspension and lifting of Board Resolution No. 231, Series of 2019.