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MANILA, Philippines — A contractor behind the Land Transportation Office’s (LTO) Land Transportation Management System (LTMS) has sought the renewal of its contract and requested an additional P2.5 billion budget for system upgrades, despite unresolved audit findings and deficiencies that persist seven years after the project's implementation.
German technology provider Dermalog made the request during a previous hearing of the House Committee on Transportation, where its representatives urged lawmakers to support the proposed funding.
According to the company, the additional budget would be used for cybersecurity improvements, fraud detection measures and anti-corruption enhancements to the LTMS. Dermalog’s contract expired on May 30, 2026.
LTO Executive Director Atty. Martin Ontog opposed Dermalog’s request, citing unresolved cybersecurity deficiencies and audit findings that continue to affect the LTMS despite 13 contract extensions. He warned that the absence of adequate cybersecurity safeguards exposes millions of driver and vehicle records to potential breaches and may place the system at risk of non-compliance with the Data Privacy Act.
The P3.14 billion LTMS has been repeatedly flagged by the Commission on Audit (COA) due to delays, incomplete features and persistent system deficiencies. Ontog noted that four consecutive COA Audit Observation Memoranda (AOMs) documented persistent deficiencies in the LTMS over several years that directly affect the LTO’s ability to perform its mandate.
COA recommended in its 2026 AOM that the LTO “demand from Dermalog and set a specific timeline to deliver and resolve remaining issues and concerns in the LTMS in accordance with the Terms of Reference to attain a completely functioning IT system and consider to include the possible sanctions in case of noncompliance.”
Apart from the COA findings, Ontog said reports from LTO field officers validated through the Transportation District Officers Association of the Philippines showed that the LTMS remains unable to process several legally mandated transactions.
He added that the 90-day proposal submitted by Dermalog on May 4, 2026, to Acting Transportation Secretary Giovanni Lopez embeds a condition requiring LTO to settle the IT contractor’s P1.2 billion financial claim within 45 days. This was the same claim formally denied and suspended under a COA Notice of Suspension which covers LTO payments to Dermalog.
Ontog maintained that the combination of Dermalog’s documented non-compliance with the LTO’s 13 formal demands for full LTMS turnover, the expiration of its contract, and unresolved cybersecurity concerns raise serious questions about extending its role in the LTMS.
He said that while the agency is prepared to facilitate an orderly transition, it cannot support arrangements that would further extend contractor control of a system that remains subject to operational deficiencies, unresolved audit findings and pending turnover obligations.
Disclaimer: This is externally supplied material from a third party and is not a product of reporting or editorial work by the Philstar.com newsroom.
