Last week, I went to the Land Transportation Office (LTO) Makati to renew the registration of my 13-year-old pick-up. I was late by one week and there is a penalty of Php200. I got the emission test earlier and was surprised to pay a new mandatory fee imposed by the LTO, the “IT/Interconnectivity fee”.
When you go to an LTO office, lots of guys will meet you several meters away. They guide you to a vacant parking area and sell you the mandatory insurance certificate or third-party liability (TPL) required by the LTO. The closer you are to the LTO office, the plentier these guys are.
Inside the LTO office, there is a clear and customer-friendly diagram, “4 easy steps to motor vehicle registration renewal”. These are (1) show documents to inspector, (2) present papers to assessor, (3) pay to the cashier, (4) wait for release of registration paper and sticker.
It indeed looks easy and simple. What are not shown in the diagram are the required papers: (1) smoke emission test certificate and (2) TPL. These two can be costly since this is an annual requirement. Below is the list of required papers and their corresponding fees:
A. Pre-registration costs
1. Emission test fee Php 350
2. IT/Interconnectivity fee 80
3. Insurance certificate 980 (some charge P600, some Php1,000+)
B. LTO registration
4. MVUC Php2,000
5. Penalty 200
6. Computerization fee 169
7. Cost of stickers 50
8. Legal research fund 10
When you go for some private agents who will register everything for you so long as you have the emission certificate, the price could be at least P400 higher to cover their (a) stencil fee, (b) service fee, and possibly other fees.
My beef are the following.
One, since the motor vehicle user charge (MVUC) is a tax and the government is supposed to give subsidized or free services to the public in exchange for the taxes that it collects, then it should not collect fees for those “computerization, stickers, legal research”. Those fees should be zero.
Two, the “IT/interconnectivity fee” is questionable. Is this the replacement for the scuttled RFID scheme that was declared illegal by the courts? Connectivity for what and for whom?
Three, better check for various TPL providers. Some or many still charge only Php600. My mistake was that I went to the LTO office without one, the LTO personnel referred me to an insurance agent right in front of their office, and those guys charged me Php1,280! When I complained why it is too high, they immediately brought it down to Php980. The LTO personnel should be getting some commission from the higher charge from those insurance agents.
On another note, there are two good things now at the LTO compared to several years ago.
One, total waiting time from submission of documents to getting the registration paper was only one hour, not many hours. Two, it is not crowded as people do not stay long, and the waiting area is air-conditioned.
But one thing to notice among the LTO guys, and I guess among government personnel in general, is that they do not or hardly smile. They seem to look at the public as just milking cows who must go to their regulatory offices anyway, and must pay whatever taxes and fees, whether they like it or not. Which is the natural behavior of a monopolist. A monopolist is not worried that their “customers” may not go to them since there are no competitors anyway, the monopolist is the single provider of a service or commodity.
Compare the staff in malls, shops, restaurants, banks, or other enterprises where they have competitors. People there are friendly, they greet their customers and they are often smiling. The prices (or “fees”) of their products and services are flexible, they have to adjust their prices from time to time, depending on the prices of their neighboring competitors.
Ok, these concerns are too minor compared to the upcoming elections. But my main beef remains: when government comes in to regulate, thinks become more expensive.