SC orders refund of RFID fees to motorists | Inquirer News

SC orders refund of RFID fees to motorists

/ 03:40 PM February 22, 2017

The Supreme Court on Wednesday has ordered a refund of the Radio Frequency Identification (RFID) fees paid by every motor vehicle owner as it nullified the P2.45-billion RFID Memorandum of Agreement entered into by the government with Stradcom Corporation (Stradcom) in 2009.

In a 30-page decision, the high court through Chief Justice Maria Lourdes Sereno said RFID fees collected during the RFID Project’s implementation prior to the Court’s issuance of its Jan.12, 2010 Status Quo Ante Order (SQAO) should be refunded.


“The RFID fees collected during the implementation of the RFID Project prior to the issuance of this Court’s Status Quo Ante Order are likewise ordered refunded to the payors thereof,” the high court said.

The RFID Project, as presented by Stradcom to the government, was an enhancement to the current motor vehicle registration system. It is an automatic identification technology whereby digital data encoded in an RFID tag or “smart label” are captured by a reader using radio waves. Put simply, it is similar to bar code technology, but uses radio waves to capture data from tags, rather than optically scanning the bar codes on a label. On June 16, 2009, the RFID MOA was entered into between Stradcom and the government through the Department of Transportation and Communications (DOTC) and the Land Transportation Office (LTO).


The government pushed through with the project because it was seen to benefit the motoring public and the transport group by detecting colorum and out of line public utility vehicles, thus increasing the income of legitimate drivers and protecting the public from unscrupulous drivers.

The high court, however, said the project should have undergone public bidding pursuant to Section 5 of the BOT Law which provides that upon the approval of a project, a notice must be made, inviting all prospective project proponents to a competitive public bidding.

“In this case, it is patently admitted by DOTC/LTO that no public bidding was conducted on the RFID Project, which was presented by Stradcom as a proposal that would enhance the existing LTO IT Project,” the Court held. It added that neither does this case fall under the exception to the rule on public bidding per Section 5-A of RA 6957, as amended by RA 7718, which states that “direct negotiation shall be resorted to when there is only one complying bidder left.”

“The RFID MOA must, thus, be struck down by this Court for failure to comply with the rules on public bidding. There is no guarantee that the RFID fee that will be charged to the public is a fair and reasonable price, as it has not undergone public bidding,” the high court said.

The high court said there is no guarantee that the public will be receiving maximum benefits and quality services, especially from the additional hardware, such as the RFID tags and readers.

“These are to be procured by Stradcom from its two suppliers, which have not been identified and are not even parties to the RFID MOA. On the other hand, Stradcom, which has been awarded the exclusive right to develop and operate the RFID system without having undergone competitive public bidding, stands to earn considerable amounts of revenue from the contract. In fact, in just three months, the period when the RFID Project was implemented prior to the issuance of the Status Quo Ante Order by this Court, the LTO had already generated P29,894,200 in RFID Fees. Clearly, the evils sought to be avoided by the requirement of competitive public bidding are evident in this case,” the Court ruled.

RFID required all vehicles to install stickers containing a microchip that stores vehicle information. For a one-time fee of P350.00, the LTO plans to install the RFID tags on some 4,760,593 vehicles thereby raising P1.6 billion in revenues. The RFID tag is supposed to last 10 years.


However, Bayan Muna, Gabriela, Anakpawis, and Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide (PISTON) said the RFID violated the 1987 Constitution for intruding into “people’s protected zone of privacy” as well as Republic Act 9184 or the Government Procurement Reform Act..

“The use of RFID tags is a threat to the right to privacy of citizens as the technology, given the proper configuration, may be used by government operatives or malicious elements for information gathering, tracking and surveillance especially since as per the LTO’s implementing rules, the tags will store “other data deemed necessary,” which is ambiguous,” petitioners said.

They also pointed out that there is neither sufficient information nor public advisory and wide public consultation on the project. “From all angles, this project does not pass muster. It would be more prudent for the government to shelve it for the meantime.” JE

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TAGS: Highway, LTO, Motorist, refund, RFID, RFID project, Stradcom, Supreme Court, toll, Transportation, vehicle
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