REPUBLIC OF THE PHILIPPINES : \.

DEPARTMENT OF TRANSPORTATION
LAND TRANSPORTATION OFFICE
East Avenue, Quezon City
E-mail Address: ltombox@lto.govJ2)} • Website: www.lto.gov,p_t1

MEMORANDUM CIRCULAR NO. 2022-2332

TO THE COMMITTEE ON DISPOSAL OF lJ NCLAIMED

IMPOUNDED MOTOR VEHICLES (C DlJ IMV);
ALL REGIONAL DIRECTORS AND ASSISTANT REGIO NAL
DIRECTORS;
ALL OFFlCES AND P ERSONNEL CONCERNED

DATE 31MAY2022

SUBJECT OMNIBUS GUIDELINES ON THE DISPOSAL OF UNCLA IM E D

IMPOUNDED MOTOR VlUHCLES

WHEREAS, in accordance ,,vith Presidential l>ecree Nu. 1729, s. 1980, the Hun.:au ol l .cl!ld
Transportation, now the Land Transportation Ollice (LTO J, is au thorized to di spose of impou nd ed
motor vehicles unclaimed by owners for a certain period of time.

WHEREAS, Section 1 of P.D. 1729 provides that "all motor vehicl es, duly impo unded by the
Director of Land Transportation or by hi s deputy or by an y other authori zed officer, which are
unreasonably and actually abandoned by their owners l'or l':li !ml'. tu pct.\' the necessary and requi red
fines and penalties vvithin a period of six month s 1·rn 111 tile date l)l ~lpp re h c n sion. sha ll be so ld and
disposed of by the Bureau of Land Transportation in a pub lic :-:;:le: l ruvid ccl. Tlrn L i1 l all cases 1

before any public sale is done, the owners of the impounded ancl ~1ban d o n ecl vehi cles shall be given
written notice and the option to redeem the said property after µaying all the necessary cha rges
within a period of fifteen (15) days from the receipt or such nolice or to participate in the public
bidding to be set and conducted by the Bureau."

WHEREAS, Section 1 of Administrative Ore.lei· ;\'u 3 cLltL\.I UK .\ pril I lJ8 I provides. that ;di 111o tm
vehicles impounded anywhere by the Bureau ol' Lane! T1-~insp o n<1llon and other l"w e n ll)rC l~rne m
agencies of the government for vio lations of Republic Ac t No. 41 J (i. as <cm1 endecL v\'hich we re
abandoned by the registered owners or where payment of fines and penalties remained unsettled
for a period of six (6) months from the elate of apprehension , shall be subject for dispo sal and
public sale by the LTO.

WHEREAS, the Comm ission on Audit (COA), in irs reply to thi: LT<> 111a1lagemtnL rul t'd tha t their
approval on the appraisal of Unclaimed Jrnpounc!ed Mo tor Vehicles (UIMV ) shal l no longe r be
required as the determination of its appraisal val uc shall be lef't to th e IV!anage ml.:'nt 's assessment.

WHEREAS , the LTO issued Memorandum Circulur Nu. 201 1-2.: -o ,;n titled '·Uniform Guid e lines
on the Disposal of Unclaimed Impounded Motor Vehicles'·.

N OW, THEREFORE, to ensure that all di sposal plili cies ari: alig.1h_'d wit h the LTO l.T. System and
to codify the prncedures in di sposing unc laimed irnpoumicd rnotu r ve hi cles i11cluding the
procedures provided in the above-mentioned LTO iss uanc e. the Omnibus Guidelines 0 11 tile
Disposal of Unclaimed Impounded Motor Vehicles is hereby prurnul gdted .

i: I\ t .. ! ; : • \ • : '.: . • • \ I .~ • I ' ~ •·

Pag e I1
SECTION 1. INVENTORY AND APPRAISAL

a. The Law Enforcement Service (LES) or the Regional Operations Division shall provide an
Inventory and Inspection Report of the motor vehicles impounded for six (6) months or
more and shall submit the same to the Committee on Disposal of Unclaimed Impounded
Motor Vehicles (CDlJ[tl..1V).

b. The CDUIMV shall conduct a physical inventory of the impounded vehicles submitted by
the Law Enforcement Service or the Regional Operations Division. A List of' Unsettled
Violations pertaining to each impounded motor vehic le. incl udin g the corresponding fines
and penalties, shall be secured from the Traffic Adjudication Service (TAS) or the Office
performing adjudication functions at the Regional Offices. This shall serve as basis for the
floor price in the public sale.

c. The CDUIMV shall prepare an inventory of motor vehicl es which will be subjected to
public sale based on the Inventory and Inspection Re7Jort submitted by the LES and the
corresponding fines and penalties pertaining to each rnotor vehicle based on the List of'
Unsettled Violations submitted by the TAS. This shall be signed by the CDUIM V and
approved. by the Assistant Secretary or the Regional Director.

d. The CD UIMV secretariat shall request certified true copies of Certificate of Registration
(CR) and Official Receipt (OR) of the motor vehicles which will be subjected to public
sale to the District Office where the documents were iss ued.

SECTION 2. PUBLIC AUCTION

a. The registered owners of the impounded motor vehicl es and if applicable, the financing
institutions to which the said motor vehicles were encumbered shall be notified of their
right to settle the fines and penalties within fifteen (15) clays from receipt of a written Notice
of Option to Redeem or Participate in the Public Biddi np, to be set and conducted by the
Bureau (LTO). After payment of the 11111:.s and p...:rrnl tics. th\:· registered owner/s and if
applicable, the financing institutions shall be entitled io c! airn the subject vehicle/s.

b. The Notice of Option to Redeem or Participate in the Public Bidding to be set and
conducted by the Bureau {L TO) shall be sent through registered mail with return card or
by personal service. Personal service of the Notice of Op ti cm to Redeem or Participate in
the Public Bidding shall be the preferred mode of service.

c. After the set deadline, MVs not claimed by regi slci c·d O\\n<:rs and financing institutions
shall be included in the final list of MVs for public S<1 k . l ike wise, the floor price shall
also be indicated in the publication.

d. After the lapse of the redemption period of fifteen ( J 5) days, the CD UIMV shall prepare
the Invitation to Bid indicating the time and place or the public sale, the final list of the
UIMVs ~.ubject thereof: including the floor prices and i1li(nmation of lien or encum brance,
ifthere is any. The I11vilatio11 to Bid shall be pu b Iishcd \ )J·, ,_..,' a week !'o r three (3 ) consecutive
weeks in a newspaper of general circulation. In additiun. it shal l be posted at the LTO
Website for three (3) consecutive weeks.

e. Bidders who purchased Bid Forms one ( 1) week before the scheduled public sale shall be
allowed to conduct an ocular inspection of the MV s subject for sale.

f On the scheduled date of the public sale. a cash bond. ,,, hi ch must be at least ten percent
(10%) of their bid amount, shall be required from the pros pecti ve bidders . After the
opening of bids, the highest bid amount shall be declared w[ nning bidder. The Abstract of
Bids and the Notice of Award (NOA}-sl9~ l~~ p,e ;i_~,~~1ecs'~Nl th~:: · wini1 Ing bidd er.
I , ,;: '. ; ;1 : 'I ': ·, ~ ' I ', r.' \ \, f·i If, . ', 'I .• I ' l r~
\ .• ~ \~ . • , .r , , " 1 • •' • ,• ~ · 11 ' -: • 1 11 ·: f • l • · 11 1 : ' 1 .' r ,
1

I
\l ff~ JUN i.: 0 '2027 TT~ ' Page I2
·\;,\
i
, r1 ·. r'r:-1v·1I - ~·
1r;:;• j! ) ;
I 1, \ 1 ~( . \
~-
, hL~.' I 1 1
-
I
. · --- · ,w ·- ··.
1't# 1 I
 g. The conduct of the public sale of unclaimed or abandoned impounded motor vehicles shall
be on "AS IS, WHERE IS" basis. All applicable fees, taxes and other expenses relative to
the transfer of ownership and re-registration shall be ru1· the account of the winning bidder.

h. A trust fund shall be opened to secure the tol<li c~1sli <1 rn u unL collected l'rom the winning
bidder. Also, this is necessary in cases when the total amou11t of payment for all the fines ,
penaltie~;, storage fees and other necessary charges per JVIV are settled with this Office, the
remaining amount will be returned to the owner or financing institution.

1. The CDU IMV shall prepare the Report oft he Sale, a copy of the Notice to Proceed (NTP)
and other pertinent documents which shall be forwarded Lo the COA for their information
and reference.

J. The winning bidder shall be advised to pull out the awarded vehicles or units within tlu·ee
(3) days from the receipt of the NTP .

k. The CDUIMV shall issue a Certificate a/Sale for every vehicle sold or for the entire lot or
batch of MVs subject of the public sale.

l. The CDUIMV shall furnish the Financial Division and the CUA copies of all documents
pertaining to the public sale of motor vehicle for record 'i <lnd accounting purposes.

m. In the event of two (2) failed public biddings, where the sum of fines and accumulated
storage fees is higher than the fair market value of the subject motor vehicles, the CDUIMV
may recommend that the actual fair market value of impounded motor vehicles shall be the
basis for the floor price subject to the approval or the .1\ ssistanL Secretary or the Regional
Director for regional offices .

n. The floor price for every motor vehicle sold at the pu blic sale shal l not exceed the sum of
fines and storage fees due to the government.

SECTION 3. RE-REGISTRATION OF AUCTIONED IMPOU NDED MOTOR VEHICLES

a. The re-registration ofUIMVs sold at the public sale shall be allowed after compliance with
requirements and procedures as stated herein.

b. A Certification shall be issued by the CDUIMV in the absence of original Certificate of

Registration (CR) and the original Official Receipt (OR) at the time of public sale. It shall
be expressly indicated in the Certification that the Of.UC R i:; not available when the JVIV
was apprehended, however, it is registered/stock reported to the LTO and said Certification
may be used for transfer of mvnership purposes in li e u of the original OR/CR including
application for PNP-HPG Clearance.

c. A Certification shall be issued by the CDUIJVIV in the absence or license plate at the time
of the public sale in lieu of Affidavit of Loss.

d. A Certification shall be issued by the CD UlMV attestin g that a Notice o/Option to Redeem
or Participate in the Public Bidding to be set and conducted by the Bureau (LTO) was sent
to the registered owner and the financing institution w herein th e UlMV is encumbered,
however, no response was received in the provided tirn c line . hence, construed as a waiver
of their rights over the vehicle.

e. All UIMV s sold at the public sale shall be first registered under the name of the winning
bidder, if such are intended to be used along public mads. The winning bidder sha ll be
responsible in processing the transfer of ownership u11cler his/ her name with the District
Office nearest to the Central Of:fic~ __Q.J: the. Regio1_1~1l Oflice. in lieu of the standard
requirements, the following list of db
I
c~1~11~u(s.'s
..
h~rti'bc /e.C:i;Lii.icd: · .

Page I3
 1. Certificate of Auction Sale
11. Certification issued by the CD UIMV und er Sectio n 3 (b)
111. Certification issued by the CDUIMV und er Section 3 (c), if applicable
1v. Certification issued by the CDUJ MV und e r Sect ion 3 (cl). ii' appli cable
v. Certified photo copy oflnventory List of A uc tion·.'d l\llVs
vi. Certified photo copy of Committee Rcso lut io11
vii. Confirmation of records when th e regi sterin g DO is outside the Regi on where
NRU/DO that issued the OR/CR is located
vui. PNP-HPG MV Clearance Certific ate
1x. Motor Vehicle Roadworthiness lnspection Re po rt (f\/!V IR)
x. Certificate of Emission Complianc e or PMV JC Tes t Repo rt
x1. Appropriate Insurance Certificate o f Cove r; and
x11. Other Documentary Requirement s deemed 11c(·L·ssar)

f. All undocumented MVs or those with no record s and/o r co rn po nc nts shall NOT be allo wed
to be registered as provided herein.

SECTION 4. LIFTING OF ALARM

a. After completion of the public sale and al l charges proper ly pa id and settl ed by the winning
bidder, the CDUIMV, through the District Offic e con cerned. sha ll o fficiall y request the
lifting of apprehension alarms and dismi ssal 0 1· ] j)Jll·-·he1 1s iu11 charges to the Traffic
Adjudication Service for SHO or the O llic e per forming itdj ud icati o n function s at the
Regional Offices.

b. After the apprehension alarms are lifted and th e d ismi ssal o f apprehension charges
concerning the MVs subject of the public sale, the \,Vinn ing bidder shall immediately cause
the transfer of ownership of the subject f\/! V s und er th e name of the said winning bidder
within three (3) working days.

SECTION 5. SALE OF IMPOUNDED MOTOR VEHI CLE WITH ENCU MBRANCE

a. Pursuant to the authority of the LTO unde r Sccti lln i ul" P.lJ . 1729 to di spose dul y
impounded motor vehicles which are unreasonabl y an d actually aba ndon ed by th eir owners
for failure to pay the necessary and required fin es and pena lt ies w ithin a peri od of six
months from the elate of apprehension in a pu blic sale. th e subject mo tor ve hicle s shall be
disposed in a public sale after notice to conc ern ed p:1n i.:s an d a ft e r the lapse of th e
1

redemption period .

b. Failure of the owners and/or financing instituti uns to :-;,:ttk \l ie li nes and pena lti es and to
redeem the motor vehicle within the prescribed fifteen (I 5) day period shall constitute as a
waiver of their rights over the subject motor vehicle .

c. After the public sale and all charges properl y pai d mid se tt led by the w inning bidder, the
CDUIMV shall submit a report to the Ass istan t Scne1211-y or the Reg ional Director,
requesting approval on the remo val of e11cu rn br:rncc 1·, ,_·, ,1,1 i11 t!1l' I. 1·0 -IT syste m upo n the
motor vehicle. Likewise , District Offic l.: wil iL·i1 is 11,::11 ,.·:-:1 tll th\:' (\:n tral Offi ce or the
Regional Office shall include in the regi stration proL'. cs:; the re moval of the encumbrance
over the sold impounded motor vehicle upon appro va l o l' the 1·eq uc st.

d. The removal of the encumbrance reco rd in th e LTO -IT svstern sha ll in no case be
interpreted as extingui shin g the liability uf til t' rc~. 1 1s 1 cT ~'d <1wner o f the subj ect motor
vehicle to the finan c ing Institution .

' '
'"
'..1• •1 ' . ' t•

Page I4
·.

SECTION 6. In disposing unclaimed impounded motor vehicles, the LTO has a preforential lien
over other creditors as provided in the Civil Code of the Philippines , to wit:

"Title XIX. - CONCURRENCE AND PREFERENCE OF CREDITS

Chapter 2
CLASSIFI CATIO N OF CREDI TS

Art. 2241. W ith reference to specific movable property of the clebtoL the following claims or liens
shall be preferred:
(1) Duties, taxes and fees due thereon to the State or any subdivision thereof;
(2) Claims arising from misappropriation, breach of trust, or malfeasance by public officials
committed in the performance of their duties, on the movables. mor1ey or securities obtained by
them;
(3) Claims for the unpaid price of movable sol d, on said movabl es, so long as they are in the
possession of the debtor, up to the value of the same; and if the mo vable has been res old by the
debtor and the price is still unpaid, the lien may be enforced on the price ; thi s right is not lo st by
the immobilization of the thing by destination, provided it has no t lost its form , substance and
identity, neither is the right lost by the sale of the thing together with other property for a lump
sum, when the price thereof can be determined proportionally;
(4) Credits guaranteed with a pledge so long as the things pledged are in the hands of the creditor,
or those guaranteed by a chattel mortgage, upon the things pledged or mortgaged, up to the value
thereof;
(5) Credits for the making, repair, safekeeping or preservation of perso nal property, on the mo vable
thus made, repaired, kept or possessed;
(6) Claims for laborers' wages, on the goods manufactured or the work done ;
(7) For expenses of salvage, upon the goods salvaged;
(8) Credits between the landlord and the tenant, arising from the con tract of tenancy on shares. on
the share of each in the fruits or harvest;
(9) Credits for transportation, upon the goods carried , for the price of the contract and incidental
expenses, until their delivery and for thirty days thereafter ;
(10) Credits fo r lodging and supplies usuall y furn ished lo lrave lcrs by hotel keepers, on the
movables belonging to the guest as long as such mo vables are in the hotel , but not for money
loaned to the guests;
(11) Credits for seeds and expenses for cultivation and har vest advanced to the debtor, upon the
fruits harvested;
(12) Credits for rent for one year, upon the personal property of the lessee existing on the
immovable leased and on the fruits of the same, but not on mo ney or instruments of credit;
(13) Claims in favor of the depositor if the depositary has vvr,rngfull y sold the thing deposited,
upon the price of the sale.

In the foregoing cases, if the movables to which the lien or pre ference attaches have been
wrongfully taken, the credit may demand them from an y possessor, within thirty days from
unlawful seizure ."

Section 7. These rules shall take effect after fifte en (1 5) days o f pub licati on in the Official Gazette
or in two (2) newspapers of general circulation in the Philippines and after receipt of a copy thereof
by the Office of the National Registry in the U.P Law Ce nter, l)i!irnan . Que zon C ity.

Section 8. All memoranda, orders, circulars, and other issuanc es in conflict herewith are hereby
revised or superneded accordingly.

For the guidance and strict compliance of all concerned.

-~---·--~-----
-·-----·--
. ;- ~
- -·-· .·. ::. ·...... ,
1\ \/j ~. f ~
, , I·,\;

··,''•,''I 1-'1

Page I5