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The MMDA start early, to clear obstructions before the morning rush hour.

MMDA don't confiscate the license for minor violations, but LGU enforcers and LTO usually do.

The ticket they give you acts as a temporary operators permit for a limited time only. If you fail to pay your ticket and redeem your license, it's considered as driving with invalid license and your vehicle is subjected to impounding.

That's what happened to the truck you saw at the end of this video.
Confiscating licenses is a hassle for the driver, but some LGUs prefer that, because it acts as more of a deterrent than the P150 penalty (DTS for example).

Confiscating licenses also results in higher payment rates, with some LGUs hitting over 95% paid tickets.

But then the process of confiscating licenses also results in some people offering bribes, to avoid the hassle.

So there's pros and cons to each approach.