Ombudsman Jesus Crispin Remulla has ordered the preventive suspension of two former Land Transportation Office (LTO) chiefs over the continued use of an older information technology system that the Commission on Audit (COA) said resulted in P13.38 billion in computer fees charged to motorists from 2019 to 2025.
Vigor Mendoza II, now chairman of the Land Transportation Franchising and Regulatory Board (LTFRB), and Teofilo Guadiz III, currently chairperson of the Office of Transportation Cooperatives (OTC), were suspended without pay for six months or while the administrative case against them is pending.
In an order dated Aug. 17, the Office of the Ombudsman said there were sufficient grounds to impose preventive suspension in connection with administrative charges for grave misconduct and conduct prejudicial to the best interest of the service.
The case centers on the continued operation of the LTO IT system run by Stradcom Corp. alongside the newer Land Transportation Management System (LTMS), which the government had developed to replace the older platform.
“The continued utilization of the LTO IT System by Guadiz and Mendoza demonstrates a patent disregard of established government policy and prior official directives intended to transition LTO operations to the LTMS,” the Ombudsman said.
COA had flagged the parallel operation of the two systems for preventing the government from fully realizing the benefits of the LTMS project.
According to the Ombudsman order, COA found that the arrangement also imposed an “additional burden and expense for the transacting public” through computer fees collected under the Stradcom-operated system.
The fees amounted to P13,379,196,499.73 from 2019 to 2025, the order said.
The government entered into a Build-Own-Operate agreement with Stradcom in 1998 for the establishment and operation of computer systems used to process LTO transactions nationwide.
The original 10-year concession expired in February 2013 and was subsequently extended on a month-to-month basis. In 2016, the LTO and Stradcom entered into a phase-out agreement that allowed the system to continue operating while the agency did not yet have a fully operational nationwide replacement.
The government contracted a joint venture led by Germany-based Dermalog Identification Systems GmbH in 2018 to develop the new LTO core system, which became the LTMS.
The LTO issued a Certificate of Project Completion and Final Acceptance for the LTMS in 2021. The platform was subsequently positioned as the government’s main system for motor vehicle registration, driver’s licensing, and other LTO transactions, with operations expected to migrate from the Stradcom system.
The Ombudsman said Guadiz, while serving as LTO chief in 2022, pushed for continued use of the older system and “favored Stradcom,” citing his position that “the old IT System provides a better solution.”
Mendoza, who became LTO chief the following year, allegedly issued several memoranda that the Ombudsman said “effectively reviv[ed] and institutionaliz[ed] the continued use of the LTO IT System through a parallel utilization alongside the LTMS.”
The order also cited a January 2025 directive from Mendoza allowing public utility vehicle registration renewals to be processed through the old system without requiring LTFRB confirmation.
According to the Ombudsman, the parallel setup allowed the continued generation and collection of computer fees despite the expiration of the original Build-Own-Operate agreement with Stradcom.
Coalition 169, which filed the complaint that led to the case, welcomed the preventive suspensions and said the investigation should determine the circumstances surrounding the alleged irregularities at the LTO.
The group said motorists had for years dealt with system disruptions, delayed services and other problems that had undermined confidence in the agency. It nevertheless stressed that Mendoza, Guadiz and the other respondents are entitled to due process.
Coalition 169 also indicated that the case extends beyond the two suspended officials, saying it would continue pursuing accountability against other respondents named in its complaint filed on May 4.
“We remain committed to pursuing accountability for all remaining respondents named in our complaint filed on May 4, 2026, until justice is fully served,” the coalition said.
The preventive suspension was imposed to preserve documents and other evidence that may be under Mendoza and Guadiz’s control and to prevent possible further malfeasance or misfeasance while the administrative proceedings are pending.
The order is immediately executory.
