COA finds misuse of road tax collections | Inquirer News

COA finds misuse of road tax collections

/ 01:45 AM July 29, 2013

The Road Board, which administers billions of pesos in road user’s tax collected yearly from motor vehicle owners, was found to have set aside only 1.7 percent of its collections in 2011 for pollution control, way below the mandatory 7.5-percent yearly allotment.

“It is the concern of the LTO (Land Transportation Office) to have emission-free motor vehicles or enforce the permissible emission level of vehicles; hence, proper allocation of resources/budget shall be observed to its law enforcement to intensify and effectively carry out its programs,” said the Commission on Audit (COA).

Studies show that women in Metro Manila have one of the highest breast cancer rates in Asia, which could be due to emissions from motor vehicles.


Old habits die hard at the Road Board, which collects at least P10 billion a year from motor vehicle owners and acts as the “road maintenance arm” of the Department of Public Works and Highways (DPWH).


It was again found misallocating funds, engaging in questionable procurement practices and forsaking its pollution control mandate that were the subject of a COA report five years ago.

In its 2011 report on the Road Board, the COA cited “lack of effective procedures” in the  evaluation of 1,011 projects amounting to P7.99 billion in 2011 by the regional offices/district engineering offices of the DPWH that resulted in the use of the road user’s tax for handpicked, nonpriority projects while turning its back on the deteriorating national roads.

Poor evaluation standards

The COA said the board’s poor evaluation standards had led to an increased risk of misallocation of funds and the nonmaintenance of priority national and local roads.

It said P62.52 million earmarked for engineering and administrative overhead expenses were not used for road maintenance, resulting in “misallocation of funds, overstatement of project costs and eventually in an inadequate quality of road maintenance.”

This practice of using the motor vehicle user’s charge (MVUC) to “cover up the vacuum” of foregone MOOE (maintenance and other operating expenses) of DPWH personnel “will result [in] an abuse in the use of the MVUC funds,” the COA said.


It said the P62.52 million diverted to overhead expenses for

DPWH engineers in 2011 was 284 percent higher than the average P15.31 million overhead budget of the DPWH from 2008 to 2010.

One of the glaring transfers was made to the Autonomous Region in Muslim Mindanao where the COA said the DPWH did not have any need for an MOOE.

The COA questioned why the Road Board released this “unreasonable amount” without consulting the budget secretary (who sits on the board) or reviewing whether these expenses fell within its charter.

The Road Board was established in 2000 to ensure the efficient management of the funds, 80 percent of which should go to the special road support fund, 7.5 percent to the special road safety fund, 5 percent to the special local road fund and also 5 percent to the special vehicle pollution control fund.

Under its charter, the road user’s tax should be used for road maintenance and the improvement of road drainage, the installation of adequate and efficient traffic lights and road safety devices, and air pollution control.

Singson ex-officio head

The seven-member Road Board is composed of the public works secretary, who serves as the ex-officio head, and the finance, budget and transportation secretaries as ex-officio members. The remaining three members come from transport and motorist organizations.

Public Works Secretary Rogelio Singson introduced in 2011 a process for requesting projects and formulated standardized unit costs in the identification and selection of MVUC projects which would require a program of works (POW) to eliminate indiscriminate release of funds and address overpricing as baseline during bidding.

Despite Singson’s reforms, the board’s evaluation process remained vulnerable to abuse.

“The rechecking of the computation of the items and unit cost and the verification of the documents submitted could not be considered sufficient evaluation procedures since these relied only on the records submitted by the (DPWH officials),” the COA said.

No paper trail

“The actual condition of the roads as shown in the documents submitted for evaluation was not conclusive information that should be relied upon. For projects that were found defective, the concerned district engineering offices were informed by the staff only through text messages or phone calls, thus there was no paper trail on the actions taken by the staff/evaluator.”

The state auditor noted that the board’s evaluation body did not have an updated highway development and management system (HDM-4) to guide them on the current condition of the roads and an updated list of road and bridge information application (RBIA) to determine whether the roads being maintained were national roads.

It said the board could not countercheck whether requests for implementing preventive and maintenance road projects were for priority roads or whether there was overlapping or duplication of projects.

“In the HDM-4, we noted that there were 2,022 roads that were classified as ‘poor’ and ‘fair’ in Regions 1 to 13. However, none of the roads listed in the HDM-4 that need to be repaired were approved by the Road Board for funding and implementation,” the COA said.

“These projects should have been taken into consideration in the selection of priority projects to be funded under the MVUC funds. In addition, it was also noted that there were funds released for NCR (National Capital Region) and ARMM although the roads in the two regions were not evaluated and included in the said HDM-4.”

The DPWH argued that the prioritization of MVUC projects was not solely based on the HDM-4 because “it is essentially a computer-generated listing of proposed projects that were obtained from reports of various engineering districts from the previous year.”

Because it takes a year before road damage can be reflected on the HDM-4, it will not accurately show the preventive maintenance needs of the country at any given time, the COA said.

From 2001 to 2008, the Road Board collected a total of P55.8 billion, according to the COA.

Based on the schedule of fees posted on the LTO website, MVUC rates for private and government passenger cars range from P1,400 to P12,000 depending on the age and weight of the car.

The starting rates for private and government utility vehicles (UV) and sport utility vehicles (SUVs) are P2,000 and P2,300, respectively. A rate of P240 is collected for private and government motorcycles without sidecars and a rate of P300 for those with sidecars.

Private and government trucks and buses are charged at least P1,800 while the rate for private and government trailers is equal to their gross vehicle weight (GVW) multiplied by 0.24.

Passenger cars for hire are charged P900 to P5,000 depending on the weight of the vehicle while motorcycles for hire are charged P300 and SUVs for hire, P2,300.

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The rate for UVs for hire and truck buses is equal to their GVW multiplied by 0.30 while the rate for trailers for hire is equal to their GVW multiplied by 0.24.—With Inquirer Research

TAGS: misuse, Philippines, Road Board

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