The head of the Land Transportation Franchising and Regulatory Board (LTFRB) and the Chairperson of the Office of Transportation Cooperatives (OTC) have just been served suspension orders.

This comes after Ombudsman Crispin Remulla ordered the preventive suspension of former LTO Chief Vigor Mendoza II and Teofilo Guadiz III due to the continued use of the STRADCOM-operated LTO information technology system that resulted in an additional PHP 13.3 billion in computer fees.

Under preventive suspension, both Mendoza (current head of LTFRB) and Guadiz (current Chairperson of the OTC) are suspended without pay for six months or during the pendency of the administrative case against them.

According to the Ombudsman, the order, which was dated August 17, 2026, found sufficient grounds to suspend Mendoza and Guadiz, citing strong evidence showing their guilt in the administrative charges for Grave Misconduct and Conduct Prejudicial to the Best Interest of the Service.

One of the chief complaints was the continued use of STRADCOM-operated LTO IT System despite the government’s implementation and acceptance of its replacement, the Land Transportation Management System (LTMS). The Commission on Audit (COA) flagged the continued parallel use of the two systems, which resulted in the “non-maximization of the benefits” expected from the LTMS project.

In addition, COA found that this caused an “additional burden and expense for the transacting public” due to computer fees charged by STRADCOM, “which amounted to PhP13,379,196,499.73” from 2019 to 2025.

“The continued utilization of the LTO IT System by Guadiz and Mendoza demonstrates a patent disregard of established government policy and prior official directives intended to transition LTO operations to the LTMS,” said the official ruling.

In 1998, the government and STRADCOM entered into a Build-Own-Operate Agreement, which covered the establishment and operation of computer systems and other infrastructures to process LTO transactions nationwide. A Final Certificate of Acceptance was issued by then the DOTC, which is now the Department of Transportation (DOTr), to STRADCOM in February 2003.

The original 10-year concession period expired on February 10, 2013, and was subsequently extended on a month-to-month basis. Then in 2016, the LTO and STRADCOM entered into a Phase Out Agreement, which allowed the arrangement to continue while the LTO had no new or replacement IT system that was fully operational nationwide.

This changed in 2018 when the government contracted a joint venture led by Dermalog Identification Systems GmbH for the development and delivery of the new LTO core system, now known as the LTMS. Then in 2021, the LTO issued a Certificate of Project Completion and Final Acceptance for the LTMS.

Following its implementation and rollout, the LTMS was institutionalized as the government’s principal platform for motor vehicle registration, licensing, and related transportation transactions, with LTO operations directed to gradually transition away from the STRADCOM-operated system.

According to the ruling, during Guadiz's term in 2022, the then LTO Chief “pushed for the continued use of the LTO IT System” and “favored STRADCOM,” with Guadiz saying “the old IT System provides a better solution”. Then, in 2023 during Mendoza's term as LTO Chief, the Ombudsman found that the former LTO Chief issued several memoranda, “effectively reviving and institutionalizing the continued use of the LTO IT System through a parallel utilization alongside the LTMS”.

In January 2025, Mendoza directed the processing of PUV registration renewals through the old system without requiring LTFRB confirmation. The Ombudsman said the parallel utilization resulted “in the continued generation and collection of computer fees despite the expiration of the BOO Agreement” for STRADCOM.

LTFRB Chief Vigor Mendoza II has released a statement following the preventive suspension order. Mendoza said he fully respects the decision of the Office of the Ombudsman in relation to the ongoing investigation.