Digital advocacy group Digital Pinoys has called on Dermalog to turn over the source code and other technical components of the Land Transportation Management System (LTMS), saying recurring outages showed the need for the Land Transportation Office (LTO) to gain full operational control of the platform.
Dermalog rejected the group’s characterization of the dispute, with an IT executive describing Digital Pinoys as a “misguided” for shifting the blame for the system’s problems from the LTO to the German technology provider.
The tech specialist said Dermalog could agree to place the source code in escrow, provided that the government simultaneously places the LTO’s alleged P1.2-billion arrears in the same escrow arrangement to protect both parties’ interests.
In a statement issued Monday, July 20, Digital Pinoys national campaigner Ronald Gustilo said the repeated disruptions experienced by motorists showed why the government should no longer depend on its former technology provider.
“The recurring LTMS outages are a stark reminder that the government must immediately regain full operational control of its own system. We call on Dermalog to immediately turn over the LTMS source code and all other contractual deliverables needed by the LTO to independently operate, secure, and manage the platform,” Gustilo said.
He said the turnover should include the technical documentation, system resources, and other components required for the LTO to operate and secure the platform independently.
“Millions of Filipinos rely on the LTMS every day. They deserve a government that has full control over the system they paid for. Every day that this transition remains incomplete is another day that the government remains unnecessarily held hostage by a foreign contractor over a critical public service,” Gustilo added.
But the tech specialist said the source-code dispute should not obscure the company’s repeated warnings to the LTO about hardware capacity, system maintenance, and restrictions on its technical access.
The executive said Dermalog chief executive officer Guenther Mull and chief technology officer Vlad Klemechov had warned the LTO several times of an “impending disaster,” but the agency failed to act on their recommendations.
In a Nov. 28, 2025 letter to LTO chief Markus Lacanilao, Mull raised what he described as the “urgent need” to refresh the LTMS hardware, which he said had already exceeded its recommended operating life.
“The existing hardware has already exceeded its recommended operational lifespan, and its progressive deterioration increases the risk of system instability. Without timely implementation of this refresh, the LTMS remains vulnerable to critical system failure,” Mull said in the letter.
He warned that such a failure could interrupt driver licensing, vehicle registration, law-enforcement access, and online transactions.
Klemechov, in Dermalog’s May 4, 2026 proposal for a 90-day transition maintenance agreement, said the company had raised the issue of post-contract continuity several times in 2025 and 2026.
“None of these communications elicited a substantive response, nor did they produce any concrete measures from LTO directed at ensuring the uninterrupted operation of the LTMS beyond 13 May 2026,” the letter said.
Dermalog proposed a 90-day maintenance arrangement that would have kept all seven LTMS core modules under technical support while the parties addressed the financial dispute, transition plan, and source-code turnover.
The company said the temporary agreement was intended to establish “a defined period within which the outstanding financial obligations, the source code and documentation turnover can be settled.”
The Department of Transportation responded on May 12 by inviting Dermalog to discuss the proposal, including the transition plan and the company’s financial claims. The department acknowledged the need to address outstanding issues to “ensure the continuity of essential operations.”
In another letter dated May 29, Mull directly warned the transportation department that LTMS storage capacity was approaching critical levels.
“If immediate mitigating measures are not undertaken, there exists a material risk that the system may experience significant degradation, interruption of services, transaction failures, or operational instability anytime in the near term,” the letter said.
Dermalog also told the department that the LTO had removed the company’s technical access to the LTMS environment, limiting its ability to intervene.
The IT specialist said these letters showed that the LTO had been informed of the operational risks before the latest outages. The executive maintained that Dermalog remained willing to complete the turnover but wanted the disputed arrears secured through an escrow arrangement while the parties resolved their claims.
The LTO has yet to respond to Dermalog’s accusation that it ignored the warnings or to the company’s proposed escrow condition.
