DOTr clarifies undelivered number plates

Last week, the Commission on Audit (COA) reported that the Department of Transportation (DOTr) and its attached agency, Land Transportation Office (LTO), have failed to deliver more than PhP 2-billion worth of license plates for both cars and motorcycles.

To set the record straight, the DOTr has released a statement outlining the reason for this development.

Supplier issue

Back in 2014, a contract was set between the then Department of Transportation and Communications (DOTC, now DOTr) and PPI-JKG Philippines, Inc. (PPI-JKG) to supply the LTO’s license plate requirements up to 2017. The contract called for the delivery of 5.2 million pairs of Motor Vehicle (MV) plates and 9.9 million pieces of motorcycle plates.

About a year later in 2015, LTO’s payment to the PPI-JKG was disallowed by the COA, after complaints were filed over some irregularities with the transaction. Due to the COA disallowance, the payment to the supplier had to be suspended, which led to a halt of the production and delivery of the license plates. Moreover, given the disallowance, the Supreme Court (SC) issued a temporary restraining order (TRO) on the distribution of the produced plates following scrutiny by several lawmakers.

2018 restart of plate production

In 2018, the Notice of Disallowance was lifted and a new contract was awarded through public bidding to the Trojan Computer Forms Manufacturing Corp and JH Tonnjes E.A.S.T GmbH Joint Venture in time for the rehabilitation of the LTO Plate Making Plant.

In 2018, the LTO plate-making facility in Quezon City started to stamp the backlogged number plates that were previously being outsourced by the agency.

It was also in 2018 that the DOTr-LTO started the release of motor vehicle plates registered in July 2016.

2019: Doble Plaka was signed into law

As the LTO was slowly beginning to catch up on a couple of years worth of plate backlog, particularly for motorcycles, a then-proposed law was being considered, mandating 2 license plates (doble plaka) on motorcycles. So, it is worth noting that in 2019, President, Rodrigo Duterte, signed RA 11235 or the Motorcycle Crime Prevention Act. The law was primarily authored by senators Richard Gordon and Tito Sotto.

Riders called the new law the “doble plaka law”, and it prescribes a bigger number plate for the rear of the motorcycle. Because of this new law, the LTO had to stop plate production again until a new plate design was approved based on the law’s Implementing Rules and Regulations (IRR).

Budget constraints

Like any government agency, the DOTr clarifies that the LTO does not keep all the money generated by the agency but rather remits them to the national treasury. Thus, it needs to request its budget allocation from the national government to fund all its programs and activities.

For example, in 2019, LTO requested PhP1,869,274,000.00 budget allocation, however, they were only granted PhP 696,747,000.00 – less than half of what was being requested. Last year, the agency requested PhP 3.574-billion but was only granted PhP 925-million (figures are rounded off) – again, less than half of what was being requested.

The LTO also contends that out of the PhP 925-million allocated, PhP 736,747,000.00 went directly to producing plates for the year 2021 and does not include the backlog.

The LTO can do it, but needs more funds

Accordingly, the LTO has already requested a budget allocation of PhP2,616,364,198.17 for the calendar year 2022 so that the agency can meet the demand to produce 16 million license plates by June 30, 2022. If ever given the right budget, the LTO is planning to outsource the production of plates for calendar years 2015, 2016, 2017, and 2022, in order to complete the projected 16 million by June 30, 2022, instead of the year 2024.