Ombudsman suspends LTFRB, OTC chiefs over P13.3-billion computer fee controversy

Abi Sarabia M., Philippine Canadian Inquirer
August 19, 2026

Photo courtesy: PNA/OTC Facebook page

MANILA, Philippines — The Office of the Ombudsman has placed Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Vigor Mendoza II and Office of Transportation Cooperatives (OTC) Chairperson Teofilo Guadiz III under six-month preventive suspension without pay, citing their roles in prolonging the use of an outdated Land Transportation Office (LTO) computer system that cost motorists P13.3 billion in extra fees.

Assistant Ombudsman Mico Clavano announced the suspension during a press briefing on Tuesday, August 18, saying investigators found strong evidence to support administrative charges of grave misconduct and conduct prejudicial to the best interest of the service against both men, who each previously headed the LTO.

“The case involves their actions as former chiefs of the Land Transportation Office and the continued use of the STRADCOM-operated LTO IT System despite the implementation and acceptance of its replacement, the Land Transportation Management System or LTMS,” Clavano said.

Old system kept running alongside its replacement

At the center of the case is the LTO’s continued reliance on its old IT system, run by private contractor STRADCOM Corporation, even after the government-owned LTMS was turned over and formally accepted as its replacement.

The Ombudsman said running both systems side by side prevented the government from realizing the full benefits of the LTMS project, based on findings from the Commission on Audit (COA).

COA’s review found that motorists paid an additional P13,379,196,499.73 in computer fees collected by STRADCOM between 2019 and 2025, an amount the Ombudsman described as an added burden and expense for the public.

Origins of the dispute

The government’s original 10-year contract with STRADCOM expired in February 2013. A 2016 Phase Out Agreement permitted the system’s continued use only for as long as the LTO lacked a fully operational nationwide replacement, according to Clavano.

The Ombudsman’s findings trace the extended use of the old system to decisions made by both officials during their respective terms as LTO chief. Guadiz, who led the LTO in 2022, is accused of pushing to keep the old system in place, arguing that it offered a better solution than its replacement.

When Mendoza succeeded him as LTO chief in 2023, he issued several memoranda that, according to the Ombudsman, effectively revived and institutionalized parallel use of the old system alongside the LTMS. By January 2025, Mendoza had directed that public utility vehicle (PUV) registration renewals continue to be processed through the old system without requiring confirmation from the LTFRB, extending the collection of computer fees beyond what the original agreement allowed.

The Ombudsman said the preventive suspension takes effect immediately. Mendoza and Guadiz now face separate administrative proceedings on the grave misconduct and conduct-prejudicial charges, though the Ombudsman’s announcement did not indicate a timeline for resolving the cases.