Ombudsman Orders LTO to Dump Stradcom System Amid Contract, Fee, and Transparency Questions

A bombshell directive from the Office of the Ombudsman has put the Land Transportation Office (LTO) under intense scrutiny, ordering the agency to immediately stop using the controversial Stradcom-operated IT system and shift all transactions to the government-owned Land Transportation Management System (LTMS).

In a May 29, 2026 directive, Ombudsman Jesus Crispin "Boying" Remulla instructed LTO officials to restore public access to the LTMS and discontinue the use of Stradcom's LTO-IT platform, citing concerns raised by state auditors over procurement, transparency, and billions of pesos collected from motorists.

The move follows findings from the Commission on Audit (COA) suggesting that the Stradcom system may have continued operating without a valid and existing contract, potentially exposing responsible officials to administrative and even criminal liability under procurement and anti-graft laws.

P602 Million in Fees Under Fire

At the center of the controversy are the computer fees paid by motorists.

According to COA findings cited by the Ombudsman, more than P602.9 million in computer fees were collected and paid to Stradcom in 2025 alone.

The Ombudsman noted a striking contrast: motorists using the government-owned LTMS do not pay such fees.

The directive also questioned why the LTMS—funded by taxpayers and operational for six years—remains underutilized while a privately operated system continues to handle major LTO transactions.

"To the Prejudice of the Filipino People"

The Ombudsman said public access to the LTMS had allegedly been restricted, depriving motorists of a government-owned platform that was designed to serve them.

The directive further raised concerns over the absence of competitive procurement, contractual transparency, audit trails, and other safeguards within the Stradcom-managed system.

As a result, the LTO has been ordered to submit within five days a detailed transition plan and proof that the agency has stopped using the questioned platform.

Complaints Reach the Ombudsman

The directive comes after months of mounting pressure from watchdog group Coalition 169, which has repeatedly questioned the LTO's continued dependence on Stradcom despite years of government investment in the LTMS.

Earlier this year, the group filed graft and administrative complaints against current and former officials of the Department of Transportation, the LTO, and executives of Stradcom Corporation.

The complaints challenged the continued collection of computer fees, the legal basis for the arrangement, and the parallel operation of the Stradcom system alongside the LTMS.

Probe May Be Just Beginning

Coalition 169 welcomed the Ombudsman's intervention but said the investigation should not stop with the latest directive.

The group called for a deeper probe to identify officials and private individuals who may have played a role in any irregularities surrounding the implementation and continued use of the system.

It also urged the government to explore possible refunds or remedies for motorists who paid fees linked to transactions processed through the questioned platform.

Warning to Officials

The Ombudsman made it clear that failure to comply will not be taken lightly.

"The Filipino people and the motoring public's right to efficient, accountable, and corruption-free public service will not be compromised," Remulla said.

With allegations involving questionable contracts, hundreds of millions in fees, and a government system left on the sidelines, the showdown over the LTO's IT infrastructure is shaping up to be one of the biggest governance controversies facing the transportation sector this year.