DEVELOPMENT BANK of the Philippines (DBP) has stopped lending to some public utility vehicle (PUV) cooperatives due to their failure to pay their debt, its top official said on Tuesday.

“Even though it’s purely developmental, if we’re not going to be paid, we don’t lend. For example, one of our mandates is the public vehicle modernization. Our past dues have gone up to about 25%, so we put a hold on that. Although it is our mandate, it won’t be sustainable if we keep lending,” DBP President and Chief Executive Officer Michael O. de Jesus said during a Senate hearing.

“We have to understand why there’s a past due and basically address those issues,” he added.

DBP’s Program Assistance to Support Alternative Driving Approaches or PASADA Financing Program is meant to support the implementation of the National Government’s jeepney modernization initiative.

Under the program, DBP will offer financing with favorable terms to transport corporations and cooperatives to allow for the smooth transition to modern public transport vehicles. Loans can partially finance the purchase of brand new PUVs compliant with the government’s vehicle standards, other alternative transport technologies, and the acquisition and/or construction of support facilities and equipment necessary for the proper operations and maintenance of the PUVs.

Mr. De Jesus added that efforts are being made to resume its funding for cooperatives that are part of the PUV modernization program, such as asking for a higher downpayment.

“We also have to make sure there’s a bigger downpayment before we lend. Before, there could be a 5% equity. Now, we’re asking for higher equity, maybe 25%, so they’ll have more skin in the game. We look for ways to make it doable because we don’t want to arbitrarily stop,” he said.

Before lending to these cooperative, DBP checks if routes for the modernized public vehicles have been established by the local government unit, Mr. De Jesus said.

“The route plans are just changed arbitrarily. Before we lend, we have to make sure there are approved route plans by the local government,” he added.

“DBP is still lending to public utility vehicle modernization despite the high past due rate in support of the National Government’s program. However, with the exception of Metro Manila and in areas without an approved route plan,” DBP PASADA Program Head Rustico Noli D. Cruz added in a Viber message.

Senator Mary Grace Poe-Llamanzares, who heads the Finance Committee, said senators recently signed a petition to temporarily halt the jeepney modernization program due to poor execution.

“There are no specific routes yet in many areas and they keep changing the goalposts in the middle of the game,” she said.

She asked the DBP to submit a list of co-ops that have not been able to repay their loans, which they will forward to the Department of Transportation (DoTr) for verification.

“We can talk to the DoTr in confidence and present it to them so they can vet the cooperatives that they are accrediting. Some of them are just getting money from these poor drivers to be part of the cooperative. They obtain a loan and then later they’ll shut down and they don’t really have any operations,” Ms. Poe-Llamanzares said. — A.M.C. Sy

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