LTO Bureaucracy 7: Cost of Annual Car Registration

This morning, I registered my car to the Land Transportation Office (LTO) for the mandatory annual vehicle registrations. This is the 3rd straight year I see this in my registration certificate -- "Sticker Not Available".

Direct cost, breakdown:

1. Motor vehicle user charge (MVUC) or vehicle registration tax, P2,000

2. Duplicate plates, P450

3. Computer fee, P169.06

4. Cost of stickers, P50

5. Legal research fund, P10.

Total, P2,679.06.

Ordinary sedans would have lower MVUC while SUVs and luxury cars would have higher MVUC. Mine is a pick up. 

On #1, this is a controversial tax, I think it  is not clear where the money goes, who or what agencies spend how much.  Tens of billions  of pesos yearly is collected from this tax alone.

#s 2 and 4 are missing. I was told to come back after 4-5 months to get them. Continuing LTO inefficiency here. 

#3, ???? There is a cost to the use of LTO computers, passed on to the motorists? But LTO gets its annual budget from our tax money. The MVUC should have covered this and other costs.
Same for #4.

Anyway, one does not go straight to the LTO for the car registration. One must get this emission certificate first.

The cost is P450. Emission test fee P370 + IT/Connectivity fee P80. Am wondering what is this "connectivity fee" and where does the money go.

One must also get a comprehensive third party liability (CTPL) insurance. I paid P600, haggled it down from the original price of P1,200+

So the total cost for a car registration is P2,680 + 450 + 600 = P3,730.

Plus fuel going to the emission test center, LTO, tips to the emission test guy, stencil guy.

In fairness to the LTO, it took me only about 40-45 minutes from the time I entered LTO Makati office to the time I got out. There is faster procedure now, little queuing. Until last year, it took me about 1:20 hour. 

Getting the emission test is longer. I went to the test center around 7:15 am, got a queuing number and was told to come back around 9am because there are many vehicles ahead of me. Them who were not accommodated the previous day, or were there before 7am. I came back 9am, was out after about 40 minutes.

LTO bureaucracy is still bad with those "Sticker not available" and "Plates not available" notes. This should not be happening. You get our money, you should deliver those permits. Plus various mandatory costs like emission tests, computerization fee, etc.

One saving grace for LTO is that it is now much faster, easier, to register our vehicles. Give credit where it is due. Thanks LTO for this improvement. 

------------

See also:
LTO Bureaucracy 3: Endless Fines and Penalties, November 02, 2011 
LTO Bureaucracy 4: Renewing a Driver's License, circa 2013, December 11, 2013  
LTO Bureaucracy 5: No Plate Available, April 05, 2015 

LTO Bureaucracy 6: On the No Plate No Travel Prohibition, April 09, 2015

LTO Bureaucracy 6: On the No Plate No Travel Prohibition

Sen. Alan Peter Cayetano posted today this poster in his fb page with this note,

Sen. Alan Cayetano is asking for a moratorium/suspension of the No Registration, No Travel policy of the LTO.

Ayusin muna systema ng Lto at supply ng plaka.

Serve the people, don't hassle them.

Within 2+ hours, there were 7,300+ likes and 1,265 shares, and counting. Very powerful message, it attracted huge public attention.

The comments are in the hundreds too. I copy-pasted the more relevant ones, posting them below. With comments like these, only very insensitive, very opportunist, very corrupt people will not be rattled and affected.

As one saying goes, "the purpose of government is to expand the government." It  is clear in this case. Government's main business is prohibition. Certain prohibitions are useful, like No killing and murder, No abduction and rape, No stealing and destruction of other people's properties.

But when prohibitions expand too much, individual freedom is sacrificed and curtailed. In this case, the freedom  of individuals to drive their own new cars and motorcycles because the LTO has problems releasing the car plates.
--------------

See also:
LTO Bureaucracy 2: Renewing a Driver's License, October 26, 2010 
LTO Bureaucracy 3: Endless Fines and Penalties, November 02, 2011 
LTO Bureaucracy 4: Renewing a Driver's License, circa 2013, December 11, 2013  
LTO Bureaucracy 5: No Plate Available, April 05, 2015

LTO Bureaucracy 5: No Plate Available

Among the most inefficient and corruption-prone agencies and  bureaucracies in the  PH government is the Land Transportation Office (LTO) under the Department of Transportation and Communications (DOTC). Below are some  of the memes and photos circulating in  facebook, twitter and other social  media. Recent Presidents of the PH from 1992, top to bottom: Fidel V. Ramos (FVR), Joseph "Erap" Estrada, Gloria Macapagal Arroyo (GMA), Benigno S. Aquino (BSA).

This and related photos are posted in the fb pages of Top Gear PH, kotse.com, etc. This occurred not just this year but 2 o 3 years ago. LTO and DOTC officials should be ashamed of this.

(This report is from Rappler, April 01, 2015.)
LTO + police officials flag down new cars with no plates, harass or penalize the drivers and car owners, arguing that the plates have been  released to the car dealers.

A friend, former head of the  National Statistics Office (NSO), Dr. Tomas Africa, posted in his fb wall this week, April 1, "I don't care who is more inefficient. We need to use the vehicle we bought from Ford EDSA Greenhills on 29 January 2015. It still has no license plate up to now. Starting today I can't use it. 62 days no license plate, 1 day no travel."

Two months with no plate, wow. My other friend got his plate after almost one year. Horrible LTO.

Car manufacturers and dealers point the finger to the LTO. This Rappler news last April 01, 2015 says that "The Chamber of Automotive manufacturers of the Philippines Incorporated (CAMPI) is urging the Land Transportation Office (LTO) to release plates recently made available as the government implements the "no registration, no travel" policy effective Wednesday, April 1.

“We hope LTO can release plates made available recently, in time for the policy's implementation," said CAMPI President Rommel Gutierrez."

And not only No Plate for new cars, No Sticker also for old cars which require annual vehicle registration with LTO. Like this photo.

My car has no sticker for two years now, 2013-2014. That "Registered, No sticker available" is stamped on the registration paper. I need to register my car again this month, Will I get that stamp again, for the 3rd year straight?

Getting plates and stickers should be easy, if no irregular transactions are happening.

This is not to say of course that the LTO-DOTC is the "odd man  out" among PH government offices and agencies. Inefficiency is generally the rule and not the exception. It's just that some agencies are more inefficient and wasteful than others.

And this is not a call  for "Big but good governance" either. As government expands, wastes and inefficiencies also expand. A simpler way is for the DOTC to have vehicle registration every 3 or 5 years, like passports and driver's license. Anyway, the LTO-DOTC can suspend the registration of any vehicle and prohibit it from being used on the roads if the driver and/or owner was involved in some serious cases like hitting seriously a pedestrian or another vehicle causing serious injuries if not death. Shrink the bureaucracy and we will shrink the inefficiencies and  wastes.

-----------

See also:
LTO Bureaucracy 1: Hidden Costs in Vehicle Registration, May 04, 2010
LTO Bureaucracy 2: Renewing a Driver's License, October 26, 2010 
LTO Bureaucracy 3: Endless Fines and Penalties, November 02, 2011 
LTO Bureaucracy 4: Renewing a Driver's License, circa 2013, December 11, 2013 
The RFID racket, January 15, 2010

LTO Bureaucracy 4: Renewing a Driver's License, circa 2013

I noticed only recently that my driver's license has already expired, in October this year. So this afternoon, I went to the Land Transportation Office (LTO) satellite office at the Ayala MRT station in Makati. I entered around 2:25pm, got my license and left at 3:58pm or total of 1:33 waiting time. This is longer than my previous experiences in the same office six years and three years ago. A driver's license expires every three years.

Six procedures, not four as the diagram at the LTO office would depict.

1. Show your soon expiring or expired license at Window 1, they will give you a license renewal form, instruct you to undergo a "medical exam".
2. Go to the next room, pay P100, and go through a "medical exam."
3. Go back to Window 1 and submit the filled up renewal form plus the certificate that you have passed the medical exam.
4. Have your photo taken plus give your electronic signature, Window 2.
5. Pay at Cashier, Window 4.
6. Get your new license, Window 3.

The "medical exam/test", you enter a small room, they get your weight, height, asks your normal blood pressure (no actual BP measurement is taken), asks you to read one line of those small random letters with your right eye close, then with the left eye close, and it's done, you have "passed" the medical test, done in 1-2 minutes. Done by J n W Drug Testing Center.

A summary of my experience in renewing a driver's license at LTO, Ayala MRT station office.

Six years ago, October 2007:
Total time spent: 55 minutes
Total fees paid: P350 + P277.63 = P627.63
Drug test fee 250 + medical test 100 = P350
License fee 180 + computerization fee 67.63 + revision of records fee (changed my address) 30 = P277.63

Three years ago, October 2010:
Total time spent: 1:20 hour
Total payment: P817.63
composed of: License fee 350, Computer fee P 67.63, drug test fee P300.00, Medical fee P100.00

December 2013:
Total time spent: 1:33 hour
Total payment: P592.63
composed of: Medical fee P100 + License fee 350 + Computerization fee 67.63 + penalty for late renewal 75

So, over the past six years, there is one improvement, they removed the drug testing procedure and payment of P300. But the waiting time remains high, more than one hour. With continued technological development almost anywhere, things should have been faster.

The aircon was pathetic. One should sit at the inner seats, away from the door, to feel the "con", otherwise, it's just hot air near the door.

Government is really slow, at adapting to changes, if changing at all. That computer fee should be abolished. Even grade schoolers now use computers and laptops in their schools, how much more with a huge government agency like DOTC and LTO.

I heard that in Singapore, a driver's license is for a lifetime. It is only removed or cancelled if the driver gets involved in a serious accident and it was the driver's fault, or the driver has committed repeated violations of certain traffic rules.

We should adopt the same practice here. But given the generally corrupt culture in the government, it is not going to happen soon.
-------------

See also:
LTO Bureaucracy 1: Hidden Costs in Vehicle Registration, May 04, 2010
LTO Bureaucracy 2: Renewing a Driver's License, October 26, 2010 
LTO Bureaucracy 3: Endless Fines and Penalties, November 02, 2011

LTO Bureaucracy 3: Endless Fines and Penalties

Last Sunday, October 30, I drove my old pick up to Pangasinan. My wife, two young girls and their yaya were my passengers. At the back are some old things that we are donating to our farm caretaker in Pangasinan -- an old refrigerator, a rice dispenser, an old cushion, etc. After paying at the first tollgate, I was stopped by a tollway guard, and told to park on the side. I was wondering what my crime was.

My violation, I was told, was UNSAFE LOAD NOT PROPERLY SECURED. The refrigator was tied, I tied it myself. Then it was blocked by the rice dispenser, then the old bed cushion, then the back or tail gate of the pick up. I thought it was properly secured already.

I told the apprehending officer, Mr. Orolaza, of TMC, deputized by the Land Transpo. Office (LTO), that I was driving slow, 65-75 kph even on a straight, pothole-free highway, and my 2 young girls (aged 5 and 1 year olds) were with me, so I really have to drive very carefully. He said it was not secure enough, that there should be a canvass cover. Well, I did not have a canvass cover, I didn't know that they would be so particular about it. I asked if they have a manual or a copy of the LTO regulation that states and defines what is "Unsafe Load Not Properly Secured", he could not produce any.

Sensing that it was fruitless to argue, I later appealed to him, "Bosing, huwag nyo na po akong hulihin, di ko kasi alam ganon kayo ka istrikto at mabagal naman ako magpatakbo", but Mr. Orolaza was determined on getting my driver's license and slapping a fine on me.

Irritated, I just shook my head at these insensitive government bureaucrats and accepted the temporary driver's permit he gave and went back to driving. He said that I can contest it at the LTO main office in Quezon City if I want to.

As I was driving slow, it took me more than four hours to reach Bugallon, Pangasinan, here at km. post 198, in front of the Bugallon Municipal Hall. Nothing moved unnecessarily, the refrigerator nor the rice dispenser or any other cargo did not tilt or whatever.

I was curious what that violation is all about, I went to the LTO website, clicked on Fines and Penalties, I see this, http://www.lto.gov.ph/fines_and_penalties/penalties.aspx#v_load_limits. It's Department Order No. 2008-39, SUBJECT: REVISED SCHEDULE OF LTO FINES AND PENALTIES FOR TRAFFICE AND ADMINISTRATIVE VIOLATIONS.

It's a looong list of various forms of violations and their corresponding fines and penalties. There were 97 different violations, with sub-sections on certain items. The closest violation that is explicitly stated in the Department Order that I can see is #75, Reckless Driving (it has 32 different forms of violations), letter (c) "Failure to provide canvass cover to cargos or freight of trucks requiring the same."

For this crime, the government will confiscate P1,000 from me before they will give back my driver's license. I paid the government motor vehicle registration charge and other fees last April, pay my personal income tax monthly, paid VAT on toll rates (the P195 became P218), paid VAT, import tax, etc. on diesel, etc. The government wants more, more money from citizens even for minor lapses.

I plan to write a letter of appeal to the LTO tomorrow when I redeem my driver's license. I do not know how receptive they are for such exercise. Will they give me a hard time, like make me wait for hours or days? If they will do it, I'll just pay the penalty and get out of their office as quickly as I can.

I should write a follow up story about this after I come back from the LTO tomorrow.
--------

See also
LTO Bureaucracy 1: Hidden Costs in Vehicle Registration, May 04, 2010
LTO Bureaucracy 2: Renewing a Driver's License, October 26, 2010

LTO Bureaucracy 2: Renewing a Driver's License

(Note: this is my article for thelobbyist.biz last weekend)

Renewing a driver's license is faster these days than say, a decade ago. But there are several fees outside the official payment in getting a license that jack up the cost to the public – and this money does not go to the National Treasury.

I renewed my driver’s license today (October 21) which expires this Sunday. I went to the Land Transportation Office (LTO) Ayala MRT terminal station at 9 am and I was done by 10:20 am, or a total waiting and procedural period of 1 hour and 20 minutes – which is not so bad.

The fees to renew a driver’s license are as follows:

License fee P350.00
Computer fee P 67.63
Drug test fee P300.00
Medical fee P100.00
TOTAL P817.63

Fees (a) and (b) go to the LTO and the National Treasury while fees (c) and (d) go to LTO-accredited private clinics. There are different private testing clinics at different LTO stations. At the Ayala MRT station LTO office, it is the JnW Drug Testing Center, Inc.

The drug test is very simple. Applicants submit a urine sample – taken right there at the clinic, and that’s the only basis if the applicant fails or passes the test for usage of any illegal drugs or substances. No one seems to fail the test too. This simple test, therefore, does not appear to cost P300 considering the huge volume of applicants that go in everyday. That fee, therefore, is high.

The medical test is also very simple. The staff in a small room simply gets the body weight of the applicant, asks him/her to read the 8th line – smaller letters – of the eye test, and it’s over. No check for blood pressure, no hearing test, etc. Thus, the P100 medical test fee for some two minutes of procedure would also appear high.

Of course people do not want to endure long procedures like their blood pressure actually being checked, undergoing some hearing test, go through chest X-ray, etc. because that would mean longer queuing time at the LTO and probably a higher medical test fee.

The P400 additional fee to the public, when multiplied by about 5 million licensed drivers (cars, trucks, buses, jeepneys, tricycles, etc.) who get their licenses every three years, should be equivalent to about P2 billion every three years or some P667 million every year. This does not go to the National Treasury but the public are required to pay if they wish to get a new driver’s license.

The above rates are all monopoly prices. Whether the driver’s license fee is P350 or P5,000, the drug test fee is P300 or P3,000, the public has no option but to pay. Otherwise, they cannot drive, or they can but without a license and risk harassment on the roads from the police and LTO personnel.

One option for reform in this area is to deregulate the submission of drug test result. People can go to other clinics that are DoH-certified and go to the LTO with their drug test and medical test results already. Most likely, they can get the certificate for such tests at a much price. So they will just pay the driver’s license fee and whatever new fee the LTO will impose. This will reduce the queuing time (30 minutes or less) and the cost of getting a license.
-----

Renewing a driver's license, 2007

(I wrote this last Oct. 22, 2007. Compare the procedures and fees here with above fees)

This afternoon, I renewed my driver's license (non-professional) which will expire 2 days from now. I went to the Land Transportation Office (LTO) at the MRT Ayala station. The place is convenient to visit, its clean and air-conditioned. The procedures are also clear. From the time I stepped inside, it took me only 55 minutes until I got out, with my new driver's license that will expire in 3 years time.

Below are the steps, and expenses, in renewing a driver's license.

1. At LTO office, go to Window 1, get the application form, fill it up.

2. Go to the adjacent room, secure a certificate that you have passed the drug test (DT) and medical test (MT). This entails:

a) Get application form from the accredited drug testing center, fill it up. Here, the clinic is "JNW drug testing center, Inc."

b) Submit a urine test, you pee on a plastic bottle in the toilet inside that room. At least the toilet does not stink.

c) Go to a small room with a male staff (I doubt if he's a physician) for the medical test. The guy just asks you to cover your right eye, then you read the letters from biggest to smallest fonts. The do the same, covering your left eye.

d) Go for a picture-taking, digital.

e) Get the test results, pay P350 (= P250 DT + P100 MT).

3. Go back to adjacent LTO office, Window 1, present the results of the DT and MT, along with the filled-up application form and your old driver's license.

4. Picture-taking, digital, as well as e-signature, for the driver's license.

5. Payment: license fee P180 + computerization fee P67.63 + revision of records (if you change your address) P30 = P277.63

6. Wait for your new driver's license to be released, done.

Summary:

Total time spent: 55 minutes
Total fees paid: P350 + P277.63 = P627.63

Compared to renewing one's passport at the DFA,the LTO process is definitely faster, but more expensive. New passport cost is P500 only, but should take an ordinary applicant at least 5 or 6 working days to get the new passport.
--------

See also: LTO Bureaucracy 1: Hidden Costs in Vehicle Registration, May 04, 2010

LTO Bureaucracy 1: Hidden Costs in Vehicle Registration

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
Sub-total 430
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
Sub-total 2,429
Total Php3,639

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.