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DBP PASADA Financing Program (Program Assistance to Support Alternative Driving Approaches)

Program Objective

– To support the implementation of the national government’s Public Utility Vehicle Modernization Program (PUVMP) and its Omnibus Franchising Guidelines (OFG) under Department Order No. 2017-011 dated June 19, 2017 issued by the Department of Transportation (DOTr).

– To offer financing with favorable terms that are responsive to the needs of transport corporations and cooperatives and allow smooth transition to modern public transport vehicles.

Eligible Borrowers

Corporations (e.g, fleet management companies) or cooperatives registered with the Office of the Transport Cooperatives participating in the PUVMP, which have been awarded, or have been qualified to receive franchises by the LTFRB under the OFG.

Eligible Loan Purpose

The DBP PASADA Program shall be used to partially finance:

  1. Purchase of brand new PUVs that are compliant with the vehicle standards defined in the OFG and in subsequent department orders and memorandum circulars of DOTr and LTFRB.
    • Type of Vehicles – buses, mini-buses, public utility jeepneys, utility vehicle (UV) express units (air conditioned or non-air conditioned); and
    • Technology Used –
      • Combustion engines compliant with emission standards (e.g. Euro 4 or higher) prescribed by the Department of Environment and Natural Resources (DENR); and
      • Other alternative transport technologies (e.g. electric or solar power) as prescribed by DOTr, subject to technology verification.
  2. Acquisition and/or construction of support facilities (e.g. off-street garage/terminal) and acquisition of equipment necessary for the proper operations and maintenance of the PUVs. Loans for above purposes can only be availed of together with the acquisition of the vehicles.

Standard Terms and Conditions

  1. Amount of Loan
    • Equity Requirement
      • Minimum of 5% for vehicle acquisition.
      • Minimum of 25% for support facilities.
    • Total Loan per Borrower
      • Maximum of 95% of the cost of the vehicle
      • Maximum of 75% of the cost of the support facilities.
    • Number of Units to be Financed
      • Maximum number of units allowed in the franchise issued to the Borrower.
  2. Interest Rate
    • Fixed interest rate of 6% per annum, inclusive of Gross Receipts tax (GRT) for the entire term of the loan.
  3. Loan Tenor / Repayment Period
    • Principal and interest payable in equal monthly amortizations; and
    • Seven (7) years with maximum grace period of six (6) months on principal
  4. Mode of Release
    • Loan release for vehicles shall be made directly to the supplier/manufacturer, for the account of the Borrower; and
    • Loan release for the support facilities shall be released to the Borrower.
  5. Fees
    • Front-end Fee: 0.5% based on approved loan amount.
  6.  Prepayment
    • Standard prepayment without penalty.

Acceptable Collateral/Security

  • Registered Chattel Mortgage (CM)
  • Comprehensive Insurance Coverage of financed projects coursed through DBP Insurance Brokerage, Inc. (DIBI) and assigned in favor of DBP
  • Assignment of Deposits with Holdout

If necessary to enhance loan package, additional collateral may be offered in addition to the above form of security, as applicable.

  1. Real Estate Mortgage
  2. Guarantees/Joint and Several Signatures (JSS)
  3. Post-dated Checks
  4. Any other collateral acceptable to DBP

Specific Terms and Conditions

  1. The borrower shall be required to comply with the environmental, safety, dimensional, and performance standards set by the regulating agencies (i.e DENR, DTI-BPS, DOTr and LTFRB);
  2. Vehicle revenues shall be captured through an Automatic Fare Collection System (AFCS).
  3. DBP shall be the settlement bank for DBP-financed vehicle loans.
  4. The borrower shall be required to open a deposit account with hold-out arrangement, for the collection of vehicle revenues, including non-fare revenues (i.e., advertising and real estate potential of properties owned by the borrower).
  5. Selection Criteria for Suppliers of vehicle units is as follows:
    1. The borrower shall be required to comply with the environmental, safety, dimensional and performance standards set by regulating agencies (i.e., DENR, DTI-BPS, DOTr and LTFRB).
    2. Vehicle revenues shall be captured through an Automatic Fare Collection System (AFCS).
    3. DBP shall be the settlement bank for DBP-financed vehicle loans.
    4. Selection Criteria for Suppliers of vehicle units is as follows:
      1. Platform and body components
        1. With established nationwide after-sales service and parts network,
        2. With technical support through a service maintenance agreement with borrower-operator, and
        3. Compliant to Philippine National Standards 2126:2026.
      2. Equipped with AFCS, GPS, CCTV and other mandatory accessories as provided for by DOTr’s OFG.
      3. Vehicle proposed for financing shall be subjected to the bank’s appraisal procedures.
  6. Selection Criteria for AFCS Service Provider is as follows:
    1. 3rd party independent service provider not simultaneously engaged in the operation of public transport, AFCS and issuance of prepaid card,
    2. Strong track record in AFCS operations, and
    3. Strong technology backbone support.

Documentary Requirements

  1. Pre-processing requirements
    1. Standards requirements
      1. DBP Application Form (Loan Record Form, Customer Information Sheet)
      2. DBP Business Plan
      3. Audited financial statements for the last three (3) years (if applicable), except for start-up operations
      4. Latest interim financial statements or alternative (if applicable)
      5. Bio-data of key officers
      6. Vehicle sales quotation (including cost of AFCS, GPS, speed limiter and other required features) from the supplier chosen by the borrower subject to final Credit and Appraisal Management (CAM) validation. Please note that the choice of supplier is strictly by the borrower.
    2. Special program requirements
      1. LTFRB Notice of Selection (NOS) for new/developmental routes or Franchise Verification with Certification/Provisional Authority (PA) for existing routes*. This will serve as clearance for operators to proceed with the acquisition of vehicle units and eligibility for the equity subsidy.
      2. Service Agreement/Contract from the AFCS Service Provider subject to final CAM validation.
      3. Letter from the Borrower indicating preferred supplier and that release of the loan and equity subsidy shall be credited to the account of the supplier with DBP.
    3. Special requirements for Corporations
      1. Certified True Copy of Certificate of Registration (SEC)
      2. Certified True Copy of Articles of Incorporation and By-Laws
      3. Latest General Information Sheet (GIS) and/or additional documents to fully establish beneficial owners of the legal entity
      4. Board Resolution duly certified by the Corporate Secretary, or equivalent document (e.g. Secretary’s Certificate), authorizing the business relationship and the signatory to sign on behalf of the entity
      5. At least two (2) copies of valid government IDs of the designated signatories.
    4. Special requirements for Cooperatives
      1. Certified True Copy of Certificate of Registration (CDA)
      2. Certified True Copy of Articles of Cooperation and By-Laws
      3. List of shareholders/cooperative membership and their shareholdings and/or additional documents to fully establish beneficial owners of the legal entity
      4. Board Resolution to sign in behalf of the entity
      5. At least two copies of valid government IDs of the designated signatories duly certified by the Secretary, or equivalent document, authorizing the business relationship and the signatory to sign on behalf of the entity.

Additional pre-processing requirements for support facilities and equipment (as applicable)

      1. Approved Building Plans, Bill of Materials, and Building Permits/Clearances
      2. Equipment Quotations
      3. Copy of TCT or Lease Contract
  1. Pre-release requirements
    1. Chattel Mortgage registered in favor of DBP.
    2. Original LTO Official Receipt and Certificate of Registration duly encumbered with DBP.
    3. Proof of 5% equity from the borrower paid to the dealer/supplier.
    4. Pro-forma Loan Agreement and Promissory Note.
    5. Certified true copy of BIR Certificate of Exemption (for Cooperatives only, if available).
    6. Comprehensive Insurance on vehicle unit based on appraised value, to be placed through DBP Insurance Brokerage, Inc. (DIBI), and assigned in favor of DBP.
    7. Other applicable requirements based on the subsequent releases of Department Orders or Memorandum Circulars by DOTr or LTFRB on new/developmental or existing routes.
  2. Post- release requirement
    1. Provisional Authority or Special Permit from LTFRB or Certificate of Public Convenience (CPC)/Franchise from LTFRB.

* Existing routes either for consolidation or dropping and substitution

For more information, please contact the following Program and Lending Officers:

Paul D. Lazaro
Phone: (632) 893-3548
(632)  818-9511 local 3310 or 3311
E-mail: pdlazaro@dbp.ph

Rustico Noli D. Cruz
Phone: (632) 893-9745 / 818-9511 local 2340
E-mail: rndcruz@dbp.ph

Raquel C. Anzures
Phone: (632) 893-3547 / 818-9511 local 2379
E-mail: rcanzures@dbp.ph

 

 

 

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