LTO Accreditation and Stock Reporting Rules

Legal basis and cited authorities

Republic Act No. 4136 (the Land Transportation and Traffic Code, as amended) is cited as the legal basis for promulgating the rules.
Republic Act No. 6539 (the Anti-Carnapping Act of 1972) is cited as a legal basis for the rules.

Policy, purpose, and program coverage

The Order establishes rules to ensure compliance, information, and guidance for all concerned.
The Order defines objectives, structure, guidelines, and procedure to ensure efficient implementation of accreditation and stock reporting for MAIRDOEs.
The Order requires accreditation rules and stock reporting processes that support efficient and effective implementation of the MAIRDOEs Accreditation Program.

Definitions governing terms

An Applicant is a natural or juridical person seeking accreditation to engage in manufacturing, assembling, importing, rebuilding, and dealership of motor vehicles and/or components.
An Application Fee is the amount collected upon filing of an application for accreditation.
An Accreditation Fee is the amount collected upon approval of the accreditation application.
An Authorized Representative is the person/s duly authorized by the applicant/grantee to represent MAIRDOEs in all transactions with the Land Transportation Office (LTO) as the official contact person.
A Certificate of Accreditation is the authority granted by LTO for MAIRDOEs to transact relative to stock reporting, sales reporting, and registration of motor vehicles and/or its components.
Validity of Accreditation is the period of effectivity of the accreditation from approval until expiration.
Operations Division (Central Office) is the LTO division responsible for receipt, evaluation, and recommendation of accreditation applications, including suspension or revocation of accreditation after due notice and hearing.
Operations Division (Regional Office) is the LTO division responsible for initial receipt, inspection, evaluation, and recommendation of new applications in its territorial jurisdiction, including monitoring continuing compliance.
A Component refers to the engine/motor, chassis and/or body of a motor vehicle.
A Manufacturer is an LTO accredited natural or juridical person engaged in local manufacture of a motor vehicle chassis and/or body.
An Assembler is an LTO accredited person engaged in local assembly of a brand new motor vehicle’s engine/motor, chassis and/or body to make brand new motor vehicles, and is a member of the Motor Vehicle Development Program (MVDP) of the Department of Trade and Industry (DTI).
An Importer is an LTO accredited natural or juridical person engaged in importation of motor vehicles and/or its components.
A Rebuilder is an LTO accredited natural or juridical person engaged in assembling motor vehicles using one or more used major components, and duly accredited by the DTI.
A Dealer is an LTO accredited natural or juridical person engaged in selling motor vehicles and/or its components.
Other Entities are LTO accredited persons authorized to import motor vehicles for personal use and not intended for sale.
e-CP is the electronic transmission of Certificate of Payment by the Bureau of Customs (BOC).
Manufacturers, Assemblers, Importers, Rebuilders, Dealers and Other Entities Reporting System is the system that processes stock reports of LTO accredited MAIRDOEs.
A Certificate of Stock Reported is the certificate issued for each unit of motor vehicle and/or its components reported to LTO.

Scope: who must be covered

The Order revises all rules and regulations governing accreditation and stock reporting of MAIRDOEs.
The Order covers accreditation and stock reporting rules for the classes of Manufacturers, Assemblers, Importers, Rebuilders, Dealers and Other Entities authorized to import motor vehicles and/or components.
The accreditation coverage includes returning residents or immigrants who own a motor vehicle for personal use and are covered by authority to import under the No-Dollar Importation Program.
The accreditation coverage includes officials and members of Administrative and Technical Staff of embassies, consulates, legation, and international organizations in the Philippines.
The accreditation coverage includes tax-exempt imported motor vehicles or motor vehicles under Written Commitment endorsed by the Department of Finance for use in various projects in the Philippines.
The accreditation coverage includes government agencies authorized to import motor vehicles.
The accreditation coverage includes individual persons authorized to import motor vehicles for personal use, provided they are covered by a written undertaking not to sell the vehicle for a period of three (3) years from the time of importation.

Accreditation: structure, process, and validity

Applicants must comply with all requirements in the Order for accreditation.
Applications must be submitted to LTO, and the required Checklist of Requirements (MAIRDOEs- Form No. 1, Form No. 2, and Form No. 3) is integral to compliance.
A Certificate of Accreditation is issued to a MAIRDOE that meets all accreditation requirements.

LTO offices and responsibilities

The Operations Division (Central Office) formulates policy guidelines, evaluates and validates applications, issues certificates, monitors performance, maintains a registry, and performs other relevant functions.
The Operations Division (Regional Office) evaluates applications within its region, inspects new applications and/or branches, recommends approval/disapproval, monitors performance within its region, and performs other relevant functions.

Filing rules and submission control

New applications are filed with Operations Division—Central Office, which endorses them to the appropriate Regional Office for inspection.
Renewal applications are filed with Operations Division—Regional Office.
Upon receipt, the Operations Division checks documents submitted against the checklist of requirements, and only applications with complete documents are accepted/processed.
The Secretariat records receipt in the application form and logs the following in the logbook: applicant name and address, classification applied for, date of filing, name and signature of the person who submitted, and O.R. No. showing payment of the application fee.

Processing timelines for compliant applications

For new applications, receipt, initial evaluation, and ocular inspection require 10 days.
For renewal applications, receipt and initial evaluation require 5 days.
Final evaluation and validation in the Central Office—Operations Division require 5 days.
Recommendation by the Executive Director requires 2 days.
Approval/disapproval by the Assistant Secretary requires 2 days.
Release of the signed Certificate of Accreditation requires 1 day.

Inspection and evaluation requirements

Only new applications with complete documents are scheduled for inspection.
Ocular inspection confirms compliance with accreditation guidelines to ensure the applicant can competently perform the accreditation applied for.
Applicants ready for an on-site inspection are informed of the schedule, while others are notified accordingly.

Approval/disapproval and finality

The Operations Division–Regional Office, through the Regional Director, recommends approval/disapproval to the Assistant Secretary through Operations Division–Central Office.
The Operations Division–Central Office recommends accreditation approval/disapproval to the Assistant Secretary through the Office of the Executive Director.
If the Assistant Secretary disapproves, written notice is provided to the applicant stating the grounds.
The Assistant Secretary’s decision approving or disapproving the application is final.

Certificate content, renewal, and updates

The LTO Assistant Secretary approves the Certificate of Accreditation for MAIRDOEs.
The Certificate of Accreditation includes: (a) the name and address/es of the establishment, (b) the classification of accreditation, (c) the accreditation number, and (d) the effectivity of accreditation.
A MAIRDOE that intends to renew must file an application at least one (1) month before the accreditation expires.
If a Certificate of Accreditation is lost or destroyed, a certified true copy may be requested based on records upon payment of the prescribed fee.
An accredited MAIRDOE must continuously comply with accreditation requirements and must notify LTO through its Operations Division at least five (5) days before effecting changes in location and classification.
Transfer of location is allowed regardless of the area applied for.

Validity period

Accreditation is valid for one year, effective on the date of approval, unless sooner suspended or revoked.

Monitoring and compliance enforcement

LTO exercises visitorial powers over MAIRDOEs anytime during office hours to ensure compliance with the Order and other related laws, rules, and requirements.
Visitorial actions may be exercised upon written instructions of the Regional Directors in their territorial jurisdictions or the Assistant Secretary.

Fees and charges; required payment

Fees and charges are collected per branch.
The Application Fee is PHP 500.00 per branch, is non-transferable and non-refundable, and is payable upon filing of the application.
A Legal Research Fund (LRF) is collected: PHP 10.00 (as stated in the fee schedule).
The Accreditation Fee (New) per classification is PHP 3,000.00 plus LRF of PHP 10.00.
The Accreditation Fee (Renewal) per classification is PHP 1,000.00 plus LRF of PHP 10.00.
Other fees include:
- Expired accreditation per classification, per year: PHP 1,000.00 plus LRF PHP 10.00
- Change of Address: PHP 500.00 plus LRF PHP 10.00
- Certified copy of Certificate of Accreditation in case of lost: PHP 500.00 plus LRF PHP 10.00
- Any other certification: PHP 100.00
- Accreditation/Certification Fee for Other Entities: PHP 1,000.00 plus LRF PHP 10.00
All fees and charges must be paid at the Collection Unit, LTO Central Office/Regional Office.

Stock reporting: operational rules and audits

Brand new vehicles (Manufacturers/Assemblers/Importers)

Authorized representatives of accredited Manufacturers/Assemblers/Importers (MAIs) submit stock reporting documentary requirements to LTO Central Office—Operations Division.
After submitting requirements, accredited MAIs report motor vehicle stocks to LTO using electronic storage devices/USB in the LTO-CSR Processing Room.
Stocks cannot be uploaded in the LTO system unless validated in the system.
Accredited MAIs personally evaluate and upload stock reports in the LTO system.
MAIs must scan stencil images, and stencil images are validated against the uploaded stocks.
If validation is correct, LTO generates a transaction summary together with the transaction ID and Payment Order Slip (POS) per transaction.
The authorized representative prints the transaction and proceeds to the LTO Collection Unit for payment of the Certificate of Stock Reported (CSR).
If validation is incorrect or has discrepancy, the transaction is terminated and voided, and the authorized representative is advised to conduct further validation with BOC to rectify discrepancies.
After payment, the authorized representative prints the Certificate of Stock Reported at the MAI/CSR Processing Room.
MAIs are solely responsible/liable for any and all stocks reported in the system.
MAIs must generate a monthly inventory report of their respective CSRs using the LTO prescribed template and submit it to the Office of the Assistant Secretary through Operations Division Central Office.
The Registration Section of Operations Division Central Office must also generate a monthly inventory report at the MAIRDOEs Core Application to monitor and ensure facility efficiency.

Brand new stock reporting documentary requirements

Stock report must be submitted in soft and hard copies.
Engine and chassis stencil images must be submitted.
BOC Certificate of Payment must be submitted.
DENR Certificate of Conformity must be submitted.

Rebuilders and used components/second-hand vehicles

Accredited rebuilders of motor vehicles, importers of second hand motor vehicles, and used components must proceed to the Registration Section/Operations Division of LTO Central Office for stock reporting.
The documentary requirements are: stock report in hard and soft copies, stencils for engine and/or chassis, and BOC Certificate of Payment (CP)/Certification.

Registration Section duties and post-audit

The Registration Section, Operations Division Central Office validates encoded data against retrieved/uploaded electronically transmitted details of e-CP for approved transactions.
If validation is correct, the Registration Section scans stencil images and validates them against uploaded and approved transaction details, and then approves/fails the report of transaction.
If approved/disapproved, the Registration Section prints and releases the Payment Order Slip if approved, or issues a rejection letter if disapproved; if disapproved, the authorized representative is advised to validate further with BOC.
After payment at the LTO Collection Unit, the Certificate of Stock Reported is printed and released to the authorized representative of the accredited rebuilder/importer.
The Registration Section generates a monthly CSR inventory report using the LTO prescribed template and submits it to the Office of the Assistant Secretary through Operations Division Central Office.
The Registration Section conducts post audit of all stocks reported and submits results to the Internal Audit Division (IAD).

Penalties and administrative sanctions

LTO imposes administrative penalties after due notice and hearing when warranted.
First offense administrative penalty is PHP 100,000.00.
Second offense administrative penalty is PHP 500,000.00 and a suspension of not more than six (6) months.
Third offense administrative penalty is cancellation of the Certificate of Accreditation and blacklisting, and cancellation of the Certificate of Stocks Reported (CSR), sales report, and registration, if warranted.
The Assistant Secretary may impose administrative action based on justifiable grounds including:
- Fraud and misrepresentation in the filing of the application and its operations, including stock and sales reporting.
- Failure to comply with standard requirements in the Order and other laws and implementing rules.
- Submission of fraudulent, fake or falsified stock/sales periodic reports required by law, rules, and regulations.
- Allowing the use of accreditation by non-accredited persons or entities.
LTO reserves the right to institute criminal actions against concerned persons or entities in fraud/misrepresentation and fraudulent reports scenarios.
Any official and/or employee who violates the Order is subject to appropriate administrative action under existing Civil Service Rules and Regulations.

Closure and notice of cessation

Accredited MAIRDOEs must inform LTO in writing, under oath, of closure stating reasons.
LTO sends a notice of cease of operations to the person or entity upon closure.
If a MAIRDOE resumes operations, it must comply with requirements for new applications.

Implementation, repeal, and separability

Any prior orders, circulars, memoranda, and related issuances or parts inconsistent with the Order are repealed or amended accordingly.
The Order provides that administrative and regulatory actions for violations proceed under due notice and hearing and through the Assistant Secretary and LTO offices defined in the accreditation process.