How Do We Go About Legalizing Irregularly-Issued Franchises?

How Do We Go About Legalizing Irregularly-Issued Franchises?

Volume XVII NO 33 (June 7-13, 2014)

First and foremost, we should work for the issuance by LTFRB en banc of a memorandum circular allowing holders of irregularly-issued franchises or CPCs to file petition for legalization individually in the Regional Board. It is similar to Memorandum Circular No. 2000-019 in which the Board allowed the legalization of taxi franchises in Baguio City issued in violation of the Public Service Law. Precisely, this is what we are asking now the Board in the pending Petition for Legalization that we filed in August 2013.

Unfortunately, in the hearing of the petition last March, the Board en banc suspended the hearing, instead, it ordered the conduct of audit of the CPCs listed in the Inventory of Irregularly-Issued CPCs submitted by the LTFRB-CAR. It is my thinking though that the audit of the Board should not have been limited to the CPCs inventoried by LTFRB-CAR consisting only of 1400 cases because, in my own honest calculation, the Regional Board granted more of these CPCs during the period of moratorium from 1996 to the present.

At any rate, in an Omnibus Motion that we will file after the Board’s audit, we will request the Board for the continuance of hearing of the pending petition for legalization. We will also ask that acceptance of application for sale and transfer be suspended in the meanwhile.

In resolving the pending petition for legalization, the Board en banc will probably be faced with several options, or so I think. These may partake of the following:
1. To deny in its entirety the petition for the reason that irregularly- issued franchises being illegal or void cannot be legalized. (however, it will have to contend with the precedence established by the Board in legalizing taxi franchises in 2000 for violations of the Public Service Act.)

2. To partially grant the legalization by way of allowing the CPCs irregularly issued in violation of the moratorium and other LTFRB rules, but not the CPCs granted in violation of law like the spurious and the fraudulent.

3. Maintain the status quo of the procedures presently observed by the LTFRB-CAR in which all applications filed by holders of irregularly-issued franchises are granted by the mere submission of the self-serving Affidavit of Undertaking (this would be the worst option that the Board will take if ever, since it will perpetuate the existence of invalid or void CPCs.)

4. Or, the Board will grant the petition, subject to terms and conditions that it may deem proper and necessary.

For the purpose herein, we will assume that the pending petition for legalization will be granted favorably.

The object of this legalization is to make all irregular CPCs in the hands of PUV operators in the Cordillera legitimate or valid for, if they remained as such they will pose danger to the security of both operators and the riding public. Otherwise put, legalization should be able to cleanse the dockets of the LTFRB-CAR of tainted CPCs or CPCs issued in violation of law, the moratorium and other rules promulgated by LTFRB en banc. We have no definite timeline for it, but legalization should successfully be completed within five (5) years by which period all cases and CPCs shall have been verified or the irregular CPCs have been determined.

To facilitate the determination of who are holders of irregularly-issued CPCs required to file petition for legalization, the following incipient presumptions can be adopted by the LTFRB-CAR (if it wants to):
1. As a rule of thumb, all CPCs issued in the first instance BEFORE the effectivity of moratorium under LTFRB M.C. No. 96-002 or M.C. 98-026 or M.C. No. 2003-028 and their derivatives (CPCs derived therefrom), all CPCs that were granted with exemptions to the moratorium and their derivatives, and all CPCs that were legalized under M.C. No. 2000-019 and their derivatives will all be deemed regularly issued, hence, legal and valid. It will only be a waste of time verifying them.
2. On the other hand, all CPCs issued in the first instance AFTER the effectivity of the moratorium under LTFRB M.C. No. 96-002 or M.C. 98-026 or M.C. No. 2003-028 and their derivatives shall be considered irregularly issued, hence, illegal and void. They shall be required to file petitions for legalization individually.
In the interim, as coordinate measures, all kinds of applications being filed at LTFRB-CAR shall undergo verification of records to determine if they are truly irregularly issued CPCs. However, to facilitate, the verifications process should make use of the above presumptions, the audited Inventory of Irregularly Issued Franchises and the previous Audit Reports made by LTFRB and DOTC personnel.

Going back, the memorandum circular to be promulgated by the Board en banc allowing legalization should perhaps contain the following terms and conditions, among others:
1. The records of LTFRB Region 1 and LTFRB-CAR, despite the attendant irregularities, shall be the sole and exclusive basis for classifying irregularly issued CPCs.

2. The compulsory filing of the petition for legalization within one (1) month upon classification of CPCs shall commence upon classification of the CPCs as irregularly issued by the LTFRB-CAR which shall be published and notice given to the operators.

3. The payment of filing fees, and penalties if not condoned (however, since the irregularities were the making of the Regional Boards, there may be equitable reasons to reduce the fees.)

4. The petition shall be processed like ordinary application for CPCs with hearing.

5. To facilitate legalization, LTFRB-CAR personnel shall be augmented by other personnel from other regions, except personnel from Region 1 from where the irregularities begun.
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AS A CAVEAT: Since Chairman Ginez had been quoted to have said he is more inclined not to legalize irregularly issued CPCs, it behoove all holders of irregular CPCs to act accordingly and fast. For, if the LTFRB Chairman can cancel fleet franchises of buses due to some violations, he could also be capable of cancelling or revoking all irregularly issued franchises in Baguio City and the Cordillera because they are invalid and void.


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