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LTFRB Rejects Indonesia’s Go-Jek Bid to Operate in PH via Local Subsidiary

For failure to pass nationality requirements in the country’s foreign ownership laws, the Land Transportation Franchising and Regulatory Board (LTFRB) denied the application of Velox Technology Philippines, Inc. to operate as a Transport Network Company (TNC) in the Philippines

Velox Philippines is a local subsidiary of Indonesian ride-hailing service Go-Jek.

The LTFRB decision was pursuant to Article XII, Section 11 of the 1987 Philippine Constitution, which states that no franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted to corporations or associations that are not at least 60 percent Filipino-owned.

The Pre-Accreditation Committee of the LTFRB observed that based on the Deed of Absolute Sale of Shares of Stock, only 20.4 percent of the 1.2 billion common shares of Velox Philippines’ parent company, Velox South-East Asia Holdings Pte. Ltd. (Velox SEA), was actually sold to local shareholder Pace Crimson Ventures Corporation (PCVC).

Further, based on LTFRB Resolution No. 2019-015, Velox Philippines also failed to present necessary documents such as Proof of Payment Capital Gains Tax (CGT) and Proof of Payment of Subscribed Shares allegedly subscribed by its shareholder, PCVC.

LTFRB Chairman Martin Delgra III maintained that the Board simply affirmed the Pre-Accreditation Committee’s resolution denying the application of Velox Philippines.

“We need to follow the 60-40 requirement of the law for TNCs to operate in the country. Kailangan po natin sumunod sa batas,” Delgra said.

Additionally, Undersecretary for Road Transport and Infrastructure Mark Richmund De Leon pointed out that the Department of Transportation (DOTr) has not taken any part in the accreditation process of Velox Philippines, emphasizing it is well within the mandate of the LTFRB to solely decide on such matters.

“The DOTr does not intervene with the decision of the LTFRB during that phase of deliberation. If Velox Philippines wishes to appeal, they can do so before the DOTr, through the Franchising Review Staff,” De Leon said.

De Leon added that the DOTr and its sectoral and attached agencies continue to abide by the tenets of transparency and accountability, as espoused by Secretary Arthur Tugade, in vital government dealings such as TNC accreditation that involve the safety and security of Filipino commuters.”

Para po kay Secretary Tugade at sa buong hanay ng DOTr, pinakamahalaga po ang buhay at kaligtasan ng ating mga pasahero. Kaya tinitiyak po natin, kasama ang ating mga attached agency, na tumatalima tayo sa batas at mga regulasyon upang matiyak ang pananagutan para sa ating mga commuter,” De Leon added.

Go-Jek

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