The PASADA Financing Program, short for Program Assistance to Support Alternative Driving Approaches is a government-initiated financial assistance scheme aimed at supporting public utility vehicle (PUV) drivers and operators in transitioning to modern, safer, and more eco-friendly transport units. Managed by the Development Bank of the Philippines (DBP), this program offers affordable financing options to help beneficiaries purchase brand-new, compliant vehicles under the government’s PUV Modernization Program. Understanding how to apply for the PASADA financing program is essential for those in the public transport sector who wish to secure stable income while aligning with modern transportation standards in the Philippines.
Launched in response to the government’s initiative to modernize the country’s public transport system, the PASADA Program is backed by Executive Order No. 44, s. 2017, which directed government financial institutions like DBP to finance infrastructure and modernization efforts, including public transportation. The program plays a critical role in promoting cleaner air, commuter safety, and improved livelihood for transport workers, making it a key pillar of inclusive and sustainable urban mobility. Knowing about PASADA is especially important now, as transport groups and cooperatives are required to phase out old PUVs and comply with the modernization roadmap to remain operational.
Program Overview
The DBP PASADA Financing Program is designed to support the modernization of the public transport sector in line with the Philippine government’s Public Utility Vehicle Modernization Program (PUVMP). It offers financing options with favorable terms to help transport corporations and cooperatives transition smoothly to modern vehicles that comply with current environmental and safety standards. Below, we’ll break down the program’s objectives, eligibility criteria, loan requirements, application process, and other key details.
Objectives
The program primarily aims to:
- Support the National Government’s PUV Modernization: The program contributes to the implementation of the PUVMP and adheres to the Omnibus Franchising Guidelines (OFG) issued by the Department of Transportation (DOTr).
- Facilitate the Purchase of Modern PUVs: It helps transport corporations and cooperatives acquire brand-new public utility vehicles (PUVs) that are compliant with the standards set by the DOTr and Land Transportation Franchising and Regulatory Board (LTFRB). The program also promotes the adoption of alternative transport technologies such as electric or solar-powered vehicles.
Loan Purposes
The DBP PASADA Financing Program provides funding for:
- Purchase of Modern PUVs:
- Eligible vehicles include buses, mini-buses, public utility jeepneys (PUJs), and UV express units (both air-conditioned and non-air-conditioned).
- Vehicles must comply with emission standards such as Euro 4 or higher, as prescribed by the Department of Environment and Natural Resources (DENR).
- Loans are also available for the acquisition of alternative fuel vehicles (e.g., electric or solar-powered units) upon technology verification.
- Construction and Acquisition of Support Facilities:
- This includes off-street garages, terminals, and other necessary equipment for the operations and maintenance of PUVs. Loans for these purposes are tied to vehicle purchases.
- This includes off-street garages, terminals, and other necessary equipment for the operations and maintenance of PUVs. Loans for these purposes are tied to vehicle purchases.
Loan Terms and Conditions
- Loan Amount:
- The loan can cover up to 95% of the vehicle cost and 75% of the cost of support facilities.
- Equity Requirement:
- A minimum 5% equity is required for vehicle purchases.
- For support facilities, a 25% equity is required.
- Loan Interest Rate:
- A fixed interest rate of 6% per annum (inclusive of Gross Receipts Tax or GRT) applies throughout the loan term.
- Loan Tenure:
- Loans are typically repayable over 7 years, with up to 6 months grace period on principal repayments.
- Repayment Mode:
- Repayments are made in equal monthly installments, covering both principal and interest.
- Loan Disbursement:
- Loan funds for vehicles are released directly to the vehicle supplier/manufacturer.
- Loan funds for support facilities are released directly to the borrower.
- Fees:
- A front-end fee of 0.5% of the approved loan amount is required.
- Prepayment:
- The loan may be prepaid without penalty.
- The loan may be prepaid without penalty.
Required Collateral
To secure the loan, borrowers will need to provide collateral, which may include:
- Registered Chattel Mortgage (for vehicles).
- Comprehensive Insurance Coverage for financed vehicles.
- Assignment of Deposits (for the collection of vehicle revenues).
- Real Estate Mortgage or Guarantees/Joint and Several Signatures (if needed).
- Post-dated checks or other forms of acceptable collateral.
Specific Terms for Vehicle Suppliers and AFCS Providers
- Vehicle Suppliers:
- The chosen suppliers must meet environmental, safety, and performance standards set by the DOTr, LTFRB, and other regulatory bodies.
- The vehicle units should include mandatory features such as Automatic Fare Collection System (AFCS), GPS, and CCTV.
- AFCS Providers:
- Providers of the Automatic Fare Collection System must be independent of the public transport operations and should have a strong track record and technology support for the system.
Who Can Apply?
Eligible borrowers include:
- Transport corporations or cooperatives that are registered with the Office of the Transport Cooperatives (OTC).
- Entities participating in the PUV Modernization Program and have been awarded or qualified to receive a franchise from the LTFRB.
Qualifications
Eligible applicants can use the loan to purchase vehicles or support facilities that comply with the standards outlined by the DOTr, LTFRB, and DENR. To qualify, they must at least meet the following eligibility criteria to ensure they are aligned with the goals of the PUV Modernization Program:
- Must be a Filipino citizen or a legal Philippine entity engaged in the public transport sector.
- Must be registered as a transport corporation, cooperative, or association duly recognized by the Land Transportation Franchising and Regulatory Board (LTFRB).
- Must have an existing and valid franchise or be part of a consolidated group with a franchise under the PUV Modernization Program.
- Must be purchasing modern, compliant units approved under the government’s modernization standards.
- Must demonstrate capacity to pay through verifiable income sources or business operations.
- Must not have any pending legal or financial issues that could hinder loan repayment.
Requirements
They also need to gather and prepare multiple copies of the following:
Required Documentation for Application
- DBP Application Form (Loan Record Form, Customer Information Sheet).
- Business Plan detailing the borrower’s intended use of the loan and long-term business objectives.
- Financial Statements: Audited financial statements for the past three years (if applicable) and the latest interim financial statement.
- Vehicle Quotation: A sales quotation from a supplier that includes the vehicle’s cost and associated mandatory features.
- Franchise Documents: LTFRB’s Notice of Selection (NOS) or Franchise Verification that certifies the applicant’s eligibility to acquire vehicles.
- Agreement with AFCS Service Provider: A service contract with the AFCS provider (subject to DBP validation).
- Special Documents for Corporations:
- Certified true copy of Certificate of Registration (SEC).
- Articles of Incorporation and By-Laws.
- Board Resolution authorizing the loan application and the signatory.
- Special Documents for Cooperatives:
- Certified true copy of Certificate of Registration (CDA).
- Cooperative’s Articles of Cooperation and By-Laws.
- Board Resolution authorizing the loan application.
Pre-Processing Requirements
Before submitting an application, you must provide:
- Building Plans and Building Permits (if applicable for support facilities).
- Proof of Equity Payment: A receipt showing the borrower’s 5% equity payment.
- Appraisal Report: A third-party appraisal or verification report for financed units and support facilities.
How to Apply
To apply, here are the steps to follow:
Step 1: Gather Required Documents
- Prepare all necessary documents, including your application form, business plan, financial statements, vehicle quotations, and franchise verification documents.
Step 2: Submit Application
- Submit your completed application and supporting documents to the nearest DBP lending unit or DBP Program Development and Management Department.
Step 3: Loan Assessment and Approval
- DBP will review your application, validate your documents, and assess your eligibility for the loan.
Step 4: Loan Disbursement
- Upon approval, the loan will be released to the supplier for vehicle purchases or directly to the borrower for support facilities.
Post-Release Requirements
After the loan is disbursed, borrowers also need to:
- Provide proof of public convenience certification or franchise from LTFRB.
- Submit delivery receipts from vehicle suppliers.
- Open a payroll account for employees of the cooperative or corporation.
Where to Get the Application Forms
You can get the official application forms for the DBP PASADA Financing Program directly from the Development Bank of the Philippines (DBP). Here’s where you can access or request the forms:
- Visit a DBP Lending Unit or Branch Office: Application forms are available at any DBP branch or lending center nationwide. You can find the list of branches through their official website: www.dbp.ph/lending-groups
- Request via Email: You may contact the Program Development and Management I Department at pdm1@dbp.ph to request digital copies of the forms.
- Contact DBP Lending Officers: Reach out to any of the lending group heads listed in the DBP website to get personalized guidance and access to the forms you need.
Video: Opening a DBP Account
The DBP PASADA Financing Program is an excellent option for transport corporations and cooperatives looking to transition to modern, environmentally-friendly public transport. With favorable terms and a comprehensive loan structure, this program can help improve the public transportation experience and contribute to the country’s jeepney modernization efforts. If you are applying for this program, you will need to not only understand the application process, provide the required documents, and meet the program’s eligibility criteria, but also have an active DBP account to receive the proceeds. To learn how to open a DBP account, just watch this video:
Contact Information
For more details about the program or to inquire about loan applications, you can contact:
- DBP Program Development and Management Department: Tel. Nos. (02) 8818-9511 local 2379, Email: pdm1@dbp.ph
- For loan applications, contact the Metro Manila Lending Group or the DBP Corporate Lending Department for Metro Manila applicants or visit the DBP Lending Groups page (https://www.dbp.ph/lending-groups/) for lending groups in the regions.