Ombudsman suspends transport chiefs over ₱13.38-billion IT fee anomaly

The Office of the Ombudsman has suspended Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Vigor Mendoza II and Office of Transportation Cooperatives (OTC) Chairperson Teofilo Guadiz III for six months without pay over a ₱13.38-billion computer fee anomaly.

Assistant Ombudsman Mico Clavano announced the immediate order following findings of grave misconduct against both officials. 

“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.

The case centers on their past leadership at the LTO, where both officials bypassed the government’s new digital platform to keep an outdated private network running.

State auditors revealed that running both systems forced vehicle owners to pay ₱13.38 billion in redundant computer charges to private contractor STRADCOM Corporation between 2019 and 2025. 

The government's original 10-year deal with STRADCOM ended in 2013, with orders to shut down the platform once the replacement system went live.

Instead of deactivating the legacy software, Guadiz pushed to retain it during his term in 2022. Mendoza later locked the dual-system arrangement into place through orders in 2023 and early 2025, allowing public utility vehicles to renew registrations on the old system while generating extra processing fees for the contractor.

The Ombudsman enforced the suspension immediately to lock down agency files, preserve physical evidence, and block witness interference as formal administrative proceedings continue.

Guadiz briefly headed the LTO in late 2022, stating that the old system worked better than the newly built Land Transportation Management System. 

“I remain confident that the evidence and the official records will show that the actions I took during my tenure as Chief of the Land Transportation Office were lawful, undertaken in good faith, and guided by my duty to serve the public interest," said Guadiz.

Meanwhile, Mendoza said he will use the legal process to defend his actions, even as the Department of Transportation will name temporary leaders at the LTFRB and OTC to keep the agencies running.