The Land Transportation Office (LTO) has urged the Supreme Court to expedite its decision on the petition questioning the P3.19-billion contract with German firm Dermalog Joint Venture for the Land Transportation Management System (LTMS).

The LTMS is a web-based platform meant to integrate all LTO services — such as the issuance of driver’s licenses, motor vehicle registration, and transport permits — into a single digital system. The contract with Dermalog was signed on 28 May 2018.

In a motion filed on 29 May, the LTO — one of the respondents in the case filed by Gerald Domingo and lawyer Jose Carlito M. Montenegro — requested the High Court to issue a ruling, citing the significant public interest involved.

Domingo and Montenegro have claimed that the contract is flawed and poses risks to national security and data privacy, as it involves the personal information of LTO clients, including themselves.

In its motion, the LTO emphasized that the case “is imbued with public interest and will drastically affect the registration, licensing, and other functions of the agency.”

The agency further explained that it is working to streamline and overhaul its current systems for vehicle registration, driver licensing, and enforcement of transport laws. These efforts require requesting Dermalog to implement specific change orders.

“Should the Honorable Court decide at a later date to declare the Dermalog contract void, the necessary change orders and system enhancements to serve the public better would have to stop,” the LTO said, warning that government funds could be wasted without clear court guidance.

The LTO added, “We need clear guidance, by way of court ruling, to determine how best to proceed with the changes needed to serve the public effectively.”

The agency also noted that then-Transportation Secretary Jaime J. Bautista approved imposing liquidated damages on Dermalog due to delays in delivering key system components. However, the LTO cannot proceed with the penalties because the issues involved in the case are intertwined with the grounds for these damages.

“Hence, an early resolution of this case will provide guidance on how to proceed with the government's claim,” the LTO said.

Instead of granting the petitioners’ plea for a temporary restraining order, the Supreme Court required both LTO and Dermalog to respond, then declared the petition submitted for resolution in April 2024.

The petitioners warned that paying Dermalog “keeps LTO technologically captured” and exposes sensitive data to unauthorized foreign access, undermining public welfare and threatening national security.

Dermalog Joint Venture consists of Dermalog Identification Systems gmBH, Holy Family Printing Corporation, Microgenesis Software Corporation, and Verzontal Builders, Inc

At the time the petition was filed, Domingo and Montenegro said the LTMS “remains incomplete and not fully utilized due to design defects, illegal contract amendments, and flawed acceptance.”

They added that less than a month after signing the contract, the LTO issued orders granting Dermalog 13 extensions from 2018 to 2021, delaying the project by nearly three years.

Reports indicate that despite over P3 billion in payments, the LTMS is not fully operational due to issues flagged by the Commission on Audit (COA) and the Department of Information and Communications Technology (DICT), including deficiencies and the need for enhancements to ensure a smooth and glitch-free user experience.