DOTr: Plate production backlog due to budget constraints in LTO

The Department of Transportation (DOTr) has clarified that the reported backlog in the production of license plates is primarily due to budget constraints of the Land Transportation Office (LTO).

The clarification was made after the Commission on Audit (COA) called out the DOTr for its failure to deliver over ₱2.1 billion worth of license plates from 2014 to 2020.

"Please note that the LTO, just like any other national government agency, remits all its revenues collected to the National Treasury. Thus, it needs to request its budget allocation from the National Government to address all its programs and activities," Transportation Secretary Arthur P. Tugade said in a statement on Saturday, August 14.

In 2019, Tugade said LTO requested a budget of ₱1.86 billion but was granted only ₱696.747. The situation was similar in 2020 when the agency requested a ₱3.5 billion budget but was only allocated ₱925.41 million.

According to Tugade, the LTO has already requested a budget allocation of ₱2.616 billion for calendar year 2022 for the agency to "meet the demand to produce 16 million license plates by June 30 next year."

To expedite the release of plates, Tugade said the LTO had also planned to outsource production for calendar years 2015, 2016, 2017, and 2022, in order to complete the projected 16 million plates by June 30, 2022 instead of the year 2024.

The DOTr chief likewise explained that the contract in question in the COA report was signed in 2014 between the then Department of Transportation and Communications (DOTC) and PPI-JKG Philippines, Inc. for the delivery of 5.2 million pairs of motor vehicle plates and 9.9 million motorcycle plates to supply the LTO license plate requirements up to 2017.

Out of these deliverables, Tugade noted that over four million pairs of motor vehicle plates and more than 7.2 million pieces of motorcycle plates were undelivered.

"In 2015, LTO’s payment to the PPI-JKG was disallowed by COA. Due to the COA disallowance, the payment to the supplier had to be suspended, which led to the stoppage of the production and delivery of the license plates from the LTO," Tugade said.

"Given the disallowance, the Supreme Court issued a temporary restraining order (TRO) on the distribution of the produced plates following scrutiny by several lawmakers," Tugade added.

The notice of disallowance was lifted in November 2018, while a new contract was awarded in the same year through public bidding in time for the rehabilitation of the LTO Plate Making Plant which expedites the production of license plates that used to be outsourced.

It was also in 2018 that the LTO started to release motor vehicle plates registered in July 2016. Based on its latest data, a total of 3,940,705 pairs of motor vehicle plates were produced by the agency as of August 10 this year.

For motorcycle plates, LTO’s latest record shows that a total of 6,019,150 pieces were produced by the agency from 2014. Of this number, 3,649,114 were produced from 2018 featuring the new design of MC plates.