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Tagging the world via RFID

Tom S. Noda | Jan. 11, 2010
With all the fuss that's been going around the Land Transportation Office's (LTO) radio frequency identification (RFID) project, only one thing is certain -- RFID, per se, will affect many people's lives.

In 1997, during the bidding for LTO's IT provider on its computerization project, Stradcom "won" as it offered the lowest user charge of Php120, significantly cheaper than its bidding rival who offered Php299.

Under the BOO contract, Stradcom will own, operate, and maintain all IT facilities at no cost to the government, while the LTO continues to handle the processing of all transactions. Because of this, Stradcom became LTO's IT provider, delivering its IT requirements. To date, Stradcom has computerized LTO's MVRS and driver's licensing issuances, except the printing of cards.

"Today, the RFID system serves only as an update to the existing MVRS. It is an upgrade, an enhancement and there is no need for any bidding. The bidding for IT provider took place already in 1997," stresses Dizon, noting that with Stradcom's exclusivity as LTO's IT provider, the company will be the one to implement the RFID project.

Dizon claims large transport groups are already supporting LTO's RFID system but some are still skeptical because they don't understand it yet.

Scheduled to be implemented in October, LTO has put on hold the project to conduct more information dissemination. LTO chief Arturo Lomibao has suggested that the system be applied first on government vehicles to serve as example and to dismiss claims that the system will be used to spy on individuals. The project is now on a voluntary basis from October to December this year.


Dizon likewise denies that the RFID system was made just to incur more funds. He says the Php350 fee for the system's tag is valid for 10 years.

"What people don't understand is that the breakdown of the Php350 fee is not only for the stickers alone. It's a lot bigger than that. It will pay for stickers, the readers, hardware, software, maintenance, services and others. So if you reduce the costs, what remains is Php240, the Php110 or more than Php90 goes to the government (treasury, VAT, LTO IT training fund, capacity building, etc.). And the net income of Stradcom per tag is only about Php14 or Php15," he says.

Dizon says the total investment on the RFID project is pegged around Php1.2 billion, or Php240 multiplied by the five million registered vehicles in the country. The Philippine has about 10 million licensed drivers.

Another misconception, Dizon cites, is that LTO doesn't need any license to implement the RFID system. It simply needs an approval from the National Telecommunications Commission (NTC) for the RFID devices.

Dizon says they are confident that LTO will soon secure a permit from the NTC since the devices' radio frequency is only around the 918, 920 megahertz band. The devices will come from Stradcom's provider Free2move, a Swedish firm and one of the leading providers of RFID system in the world.


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